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Canadian CFOs set a course to embed sustainability into finance

Steve Roder is senior executive vice-president and chief financial officer, Manulife

"It is not necessarily a choice between making money on the one hand and 'doing the right thing' on the other. On the contrary, once it is recognized that 'business as usual' is unsustainable, it follows naturally that those organizations which start to develop resilient business models will be the ones that succeed."

– The Prince of Wales

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His Royal Highness is right: Business as usual is not sustainable. And what we don't measure, we can't manage. I am delighted to report that CFOs from across Canada agree and are coming together to form the Canadian Chapter of The Prince's Accounting for Sustainability (A4S) CFO Leadership Network.

I was honoured to be invited to co-chair the Chapter. It is a remarkable opportunity to advance the sustainability conversation within the finance community and more broadly. My decision to join the Chapter was driven by Manulife's investors, employees and other stakeholders increasing demand for insight into our sustainability performance.

The Chapter is the first one outside Europe, and is run in partnership with the Chartered Professional Accountants of Canada (CPA Canada) and supported by Prince's Charities Canada. Our founding members include Manulife, the Workplace Safety and Insurance Board, Brookfield Asset Management, the City of Vancouver, The Co-operators, Ontario Municipal Employees Retirement System, British Columbia Investor Management Corp. and Metrolinx.

It is about Canadian CFOs, as finance leaders, coming together to focus on the key challenges faced by Canadian organizations in integrating sustainability into decision making, and developing practical guidance by finance professionals for finance professionals.

After attending the A4S Annual Summit, where Prince Charles talked about business solutions urgently needed in our age of "Great Acceleration," I came to further understand the bigger picture.

Forward-thinking businesses must rise to meet socioeconomic and environmental challenges, identify new opportunities and manage risks to the health and wealth of people, the planet and the global economy. As such, Manulife's role goes beyond the traditional risk carrier's protection of physical and financial health.

We can also contribute to sustainable economic development through reducing and preventing environmental and social risks, such as poverty and disease. For instance, Manulife Vitality and ManulifeMOVE insurance products promote wellness and financially reward customers for making healthy choices. We underwrite micro-insurance for underserved populations in Asia. And we offer mutual funds that incorporate management of environmental, social and governance risks.

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As a sizeable global investor with close to $1-trillion in assets under management and administration (and with life-insurance liabilities often going 25 to 50 years into the future), we are in an excellent position to promote the long-term investment urgently needed to close the global $2.5-trillion (U.S.) to $3.5-trillion annual infrastructure investment gap and transition to a sustainable economy.

Financial institutions such as ours, and the diverse membership of the Chapter, also play an important role in growing human capital and enhancing economic productivity. For example, Manulife's investment in training addresses the skills shortage, whether it is domestically in Canada in the context of digitization and the aging population, or building a qualified pool of actuaries in Asia.

For me, as a CFO, understanding the experience of my peers in Canada and around the world is essential. Together, we will seek to find practical ways to adapt traditional approaches to financial decision making enabling an effective response to critical environmental and social risks and opportunities. In this way, Canadian finance teams are coming together to dispel the myth that sustainability does not correlate to profitability and to shape our organizations for long-term value creation.

For example, the capital expenditure work stream led by one of our British A4S counterparts, a multinational utility company, shows how work to embed sustainability criteria into design innovations resulted in up-front cost savings of about £3-million ($5-million Canadian) for a major project.

The establishment of the Canadian Chapter of the CFO Leadership Network could not have come at a better time. In light of our government's progressive environmental and social agenda, it is a unique opportunity for the Canadian CFOs to build on that momentum and drive change.

Canadians are fortunate to be endowed with natural riches and stable social institutions. Today, our CFO Leadership Network sets sail to embed sustainability into Canadian finance, and to protect and enhance our abundant natural and social capital.

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