The Knowns & The Unknowns – Bridging the Sustainability GAPS for the CFO

Accounting is deeply rooted in compliance frameworks with global financial standards that, in many ways, have remained consistent for almost 100 years. The fundamental rules of double-entry bookkeeping, accrual accounting, and reporting financial performance have persisted through decades, giving finance professionals a stable foundation to navigate business dynamics. Yet, while the framework has endured, the world around us has shifted dramatically and the demands on CFOs have evolved in ways that challenge these long-standing norms.

Historically, finance professionals were comfortable navigating a finite set of possible business outcomes. We followed a well-defined set of rules, supplemented by a handful of variables such as GDP or CPI, which could be modelled into forecasts and business plans. Uncertainty existed, but it was relatively manageable and could be captured through scenario planning, sensitivity analyses, or stress-testing within well-understood boundaries.

But the context in which CFOs operate today is profoundly different. In the past, we operated in a world of assumed infinite growth, with limited recognition of environmental, social, and natural boundaries. Traditional cost accounting rarely accounted for the impact of business operations on nature, unless the business was inherently extractive, like logging or mining. Today, the environmental and social pressures confronting business leaders have created multiple visions of what is possible. Some of these complexities can be quantified, such as carbon emissions, energy consumption, or resource efficiency. Others, like social license to operate or the systemic impact of climate change, remain evolving and harder to measure.

Financial modelling itself has undergone a transformation. Ten or twenty years ago, CFOs could plan in two dimensions: revenue versus cost, profit versus loss, internal efficiency versus external market growth. Now, we must consider multi-dimensional factors: climate scenarios, ESG metrics, regulatory changes, stakeholder expectations, and systemic risk. Models that once assumed infinite growth must now account for resource constraints, climate risks, and evolving social expectations. The CFO’s mindset is shifting from purely predictive modelling to scenario planning, stress-testing, and adaptive forecasting.

These changes are mirrored in the world around us. Just as extreme weather events such as floods, fires, and storms have accelerated from a 1-in-100-year frequency to 1-in-10, CFOs now face business transformations that require more frequent, agile, and complex decision-making. The pace of change has accelerated, and the stakes are higher. Where previously business transformations were once-in-a-lifetime events, today they can occur multiple times within a CFO’s tenure, requiring rapid adaptation and innovative thinking.

CFOs are now required to bridge gaps across multiple dimensions:

1. Within the finance team – translating sustainability data into actionable insights while upskilling teams to understand and manage non-financial metrics.

2. Across the executive team – aligning business strategy, operational decisions, and financial forecasts with sustainability objectives and risk management.

3. Between the business and the world – ensuring external stakeholders, including investors, regulators, and communities, understand the company’s performance, risks, and opportunities related to climate and sustainability.

My Insights as CFO to Navigate These Three Key Questions

1. Are our systems ready to manage sustainability data?
   In my earlier blog in this series, I discussed systems debt, a situation that has unfolded over the past 20 years due to investment being prioritised toward front-line, revenue-generating projects. The consequence has been a shortfall in capability for managing non-financial data. I vividly recall a whole team being budgeted for data cleansing and mapping, which at the time felt like a “nice to have” rather than a “must have.” Today, that investment is no longer optional, robust systems are essential for capturing, analysing, and reporting ESG metrics alongside traditional financial data.

2. How are sustainability risks and opportunities integrated into our financial models?
   I call this principle: “If our spreadsheets don’t change, nothing changes.” Financial models need to evolve to include climate and sustainability-linked metrics in internal business cases. CFOs must consider how environmental and social risks and opportunities are reflected in the cost of capital, including adjustments to WACC or scenario-based stress tests. The tools and methodologies to quantify these risks are now emerging, and incorporating them requires a mindset shift from purely historical analysis to forward-looking, system-aware thinking.

3. Can finance leadership communicate sustainability insights effectively?
   Finally, even with the best systems and models, CFOs must ensure their finance teams can bring the numbers to life. I have worked with many teams over the past 20 years that struggle to translate financial insights into a language others can understand. The challenge is magnified when it comes to ESG: problem-solving for sustainability requires finance professionals to understand the business, the data, and the broader societal implications, and then communicate these insights confidently to internal teams, boards, and external stakeholders. Without this capability, even the most sophisticated modelling fails to influence decision-making.

If you are a CFO or senior finance leader navigating the complexities of sustainability, you don’t need to face these challenges alone. At FutureValue, we are working with businesses to build finance leadership capability and prepare teams for climate-mandated reporting.

We can help your organisation:

• Assess your current baseline and identify gaps in systems, data, and processes.

• Identify and quantify risks and opportunities associated with climate and sustainability.

• Integrate climate scenarios into your financial modelling and strategic planning.

By partnering with experienced advisors, CFOs can ensure their finance teams are equipped to manage the knowns, embrace the unknowns, and confidently lead their organisations into a sustainable future. If you want to explore how to strengthen your team’s capability and navigate these emerging requirements, reach out to us at FutureValue, let’s start the conversation today.