Where does green controlling stand?
In corporate controlling, the topic of sustainability has matured in recent years. However, controlling is not or only very little involved in the implementation of social and ecological corporate goals. Controllers are called upon to act more strongly on their own behalf vis-à-vis their management boards. Controlling should also network more closely with the departments that deal with sustainability aspects. This is the conclusion of the 2016 Green Controlling Study of the International Controller Association (ICV).
The Green Controlling Study 2016 was designed to ascertain the current status of green controlling. The main focus was on changes in the degree of implementation and relevance of green controlling compared with the first study from 2010. For the first time, the controlling of social issues was also considered.
Volatile times for the sustainability issue
The authors begin their report by noting "volatile times for the sustainability issue." Although the issue of sustainability has continued to gain in importance, contradictory developments cannot be overlooked. For example, landmark decisions at the climate summit in Paris were overshadowed by environmental scandals that "clearly call into question the seriousness of sustainable development at the corporate level" for some companies. In parallel, regulatory pressure to publish non-financial information (e.g., on environmental and labor issues) is increasing, he said. At the same time, a decline in commodity prices such as oil can be observed, which in turn can be detrimental to the business case for sustainability.
Meet customer requirements, improve corporate image
The ICV's second Green Controlling Study has shown that the strategic importance of sustainability in companies has increased compared to 2010, albeit to a lesser extent than had been expected five years ago. In corporate controlling, the topic of sustainability has matured in recent times. By a more "grown-up" approach, the authors mean that economic benefits are now in the foreground, combined with social responsibility and the fulfillment of legal obligations. It also became apparent that a company's sustainability strategy is decisive for how green controlling is designed. According to this, companies that are holistically sustainable, for example, rely significantly more on green controlling than companies that follow a compliance-dominated strategy, for example.
Since the first study, the proportion of companies pursuing a market-oriented strategy of "green products and solutions" in the context of sustainability has grown. "Meeting customer requirements and improving the company's image are among the most important objectives to be achieved with an ecological orientation," the study said. This had also examined where the main responsibility for the topic of sustainability lies in the companies: Here it is not controlling, but top management and the departments specializing in this topic (e.g. environmental management).
Measure- and reporting-oriented tasks
When asked about the most important motives for involving controlling, the main reasons given were better financial evaluation of sustainability measures and the provision of suitable systems and processes by controlling. In contrast, a lack of resources in controlling and the conscious decision not to involve controllers were among the main barriers to involvement. Management seek support for environmental and social decisions primarily through the provision of KPIs and reporting information. Companies with a holistic green strategy also have a very comprehensive need for support, including in the context of strategy development and implementation.
The majority of the companies surveyed view the future responsibility for green controlling as integrative, i.e., as a shared responsibility between corporate controlling and sustainability management. The most important tasks of green controlling include above all those that can be characterized as measure- and reporting-oriented task types.
More self-promotion needed
As the study also shows, controlling often lacks the capacity to take on green controlling tasks, or the involvement of controlling is even undesirable. The authors conclude: "In summary, it should be emphasized that the management of many companies apparently does not yet see the controllers as a point of contact for green controlling. In this respect, controlling should be more active in promoting its own cause so that it can become involved in the implementation of ecological and social goals in the company. In addition, controlling should network more closely with the departments that deal with sustainability aspects. This includes both environmental management and the human resources department."
More information: www.icv-controlling.com
