The CFO’s expanding role in ESG reporting

As ESG disclosure requirements become more rigorous, reporting is increasingly landing in the CFO’s domain—where established systems for accuracy, governance, and assurance already exist. This shift is also raising the strategic profile of the CSO, positioning sustainability as a company-wide priority rather than a siloed function. But realizing the full potential of this transformation, both for business and for society, will require close collaboration between both departments. 

CFO involvement is growing—and it’s not a passing trend

Recent research by Verdantix reveals that CFO involvement in ESG has grown substantially, with many finance leaders now influencing how sustainability is embedded across the business. They also underscore the CFO’s contribution to diverse sustainability program areas, from data collection to double materiality, to software selection and external assurance. 

Moreover, CFOs are also emerging as key decision-makers in how sustainability efforts are resourced and financed. It’s a shift in influence that’s being recognized across the field: according to Verdantix’s 2024 ESG and sustainability global survey, 73% of sustainability leaders view the CFO as one of the most influential figures in funding ESG strategies—second only to the CEO and CSO.

Indeed, this recentering of power towards the CFO is fueled not only by regulatory expectations, such as the CSRD, but also by rising investor demand for transparent, high-quality data. As sustainability reporting becomes more complex and assurance-ready, finance teams are becoming increasingly involved—bringing their expertise in controls, disclosure, and auditability to the table.

ESG needs financial muscle

Sustainability may have once operated in a silo, but that’s quickly changing. As material ESG risks increasingly impact business performance, they’re being recognized not as “non-financial,” but as pre-financial—issues that directly influence the bottom line. This shift is pulling sustainability into the core of enterprise risk and strategy, where CFOs are natural stewards. 

We explore this evolving dynamic more deeply in our article The CFO’s Time in Corporate Sustainability Many competencies essential to the CFO role naturally support the needs of a company’s ESG program—from performance tracking to disclosure and risk governance. When it comes to ESG data analysis, for example, finance teams bring valuable skills in developing and applying metrics, KPIs, and reporting systems that track progress and demonstrate how sustainability efforts create shareholder value. 

Furthermore, engaging and deepening your CFO’s buy-in on sustainability’s financial benefits to the business can help shift traditional short-term-focused discussions—such as earnings calls and annual budget planning—toward longer-term conversations on value creation and forward-thinking risk management.

“As firms increasingly require investor-grade ESG data, CFOs can collaborate with sustainability leaders – who typically lack this expertise – to apply the same level of rigour to sustainability information as to financial data.”

• Strategic Focus: The CFO's Influence On ESG Reporting; Verdantix, May 2025 

Bring your CFO into the materiality conversation

Double materiality has become one of the most strategic and nuanced aspects of ESG reporting. With regulations like the CSRD requiring companies to assess both how sustainability issues affect financial performance and how business activities impact people and planet, the materiality bar has been raised. This shift demands deeper, cross-functional engagement—and CFOs are stepping up.

Verdantix highlights a growing trend of CFOs actively participating in double materiality assessments (DMAs), recognizing their value to both sustainability and finance teams. Their involvement can help ensure that the risks, opportunities, and impacts identified during the process are accurately incorporated into financial disclosures. The CPA Journal also points to the finance team’s potential role in stakeholder engagement, supporting efforts to determine which ESG topics are most material from both a financial relevance and broader impact standpoint.

Ultimately, inviting finance into the materiality process doesn’t just strengthen your disclosures—it helps sharpen your strategy and identify which ESG risks and opportunities are most financially relevant to your business.

CFOs are stewards of data quality and financial rigor. Thus, their expertise is critical to delivering investor-grade ESG reporting.

Strengthen ESG data quality in partnership with finance

Low-quality ESG data doesn’t just complicate reporting—it introduces real risk. More specifically, incomplete, inconsistent, or poorly governed data can lead to inaccurate market valuations, weaken decision-making, and make it harder to manage ESG issues effectively. Investors and assurance providers are paying closer attention, and CFOs are often the first to flag the concerns.

According to EY’s 2024 Global Corporate Reporting Survey, 55% of finance leaders believe sustainability reporting in their industry risks being perceived as greenwashing. This credibility gap reflects the persistent and ongoing ESG data management and reporting challenges that companies face. 

This is where finance leaders become essential partners. As we outline in CFOs and CSOs Will Save the Planet (Together), the finance function brings decades of experience with internal controls, regulated disclosures, and audit-ready data. Applying this infrastructure—and mindset—to ESG reporting is a necessary step toward delivering sustainability data that’s credible, consistent, and built to withstand scrutiny.

“More than half of finance leaders feel sustainability reporting in their industry risks being perceived as including elements of greenwashing.”

• EY’s 2024 Global Corporate Reporting Survey

What companies can do now

Improving ESG data quality isn’t just about avoiding risk—it’s about building the infrastructure for credibility and long-term value. Partnering with finance can help sustainability teams:

• Establish robust ESG data governance practices—foundational to a company’s entire sustainability program 
• Bolster data confidence by strengthening internal controls and validation procedures for every single data point 
• Centralize sustainability data by migrating it from disparate systems into a single source of truth 

ESG software is becoming a must-have

As expectations for auditability and data quality rise, more companies are turning to ESG reporting software to strengthen how ESG data is collected, governed, and managed. The right platform helps centralize data from across the organization, apply controls and validations, and create a reliable foundation for assurance and decision-making.

For teams looking to improve their ESG data infrastructure and get audit-ready, the ESG Software Buyer’s Guide offers a practical roadmap for evaluating tools and capabilities. Download your copy via the form below.