11/04/2024
Finance and ESG Integration: A Growing Trend
As climate-related financial disclosures become mandatory, there's a growing trend towards deeper integration of finances and sustainability. ESG considerations are increasingly under the purview of CFOs and financial controllers. Carbon is being viewed both as an asset and a liability, particularly in anticipation of global carbon pricing or mandated carbon removal purchases.
A novel concept of ""liability-driven"" emissions is emerging, aiming to make risks and liabilities more visible on balance sheets. This entails calculating future emissions taxes and downsides associated with fossil fuel production.
In 2024, ESG teams are expected to collaborate closely with finance and risk management teams. This collaboration may involve establishing internal carbon prices and evaluating potential impacts of a more regulated carbon environment.