Skilled migration: A new paradigm for Government

ESG: Three critical developments you need to be across

An accountability callout for CFOs

By Toby Kent, PwC Private ESG lead, PwC Australia

In recent years, there has been talk of the CFO title evolving to become the Chief Reporting Officer, Chief Performance Officer or even Chief Sustainability Officer. This is largely due to the ever-growing expectations of both listed and privately held companies to communicate their broad impacts on society.

My instinct is that the CFO title is too respected, too tightly coveted to shift in the near term but then as Shakespeare didn't quite say, “what’s in a name? That which we call a CFO by any other name would smell as sweet…”

Regardless of title, three critical developments have taken place in November 2022 that will have profound implications for how companies manage data and report across environmental, social, and governance (ESG) domains.

On 8 November, at the UN Conference Of Parties 27 (COP 27), climate conference in Sharm El Sheikh, the IFRS Foundation, announced that it is achieving its mandate to establish global standards for sustainability related reporting disclosures under the International Sustainability Standards Board (ISSB), itself established at the Glasgow COP in 2021. The ISSB says that it is set to publish its first two standards in 2023, focused on climate. In a short amount of time, it intends to set standards across all ESG or sustainability aspects. 

The ISSB standards are focused on listed companies. As Emmanuel Faber, Chair of the ISSB, said at COP27 one of its key aims is to “empower market participants with the right information to support better economic and investment decision making”. However, the nature of climate reporting and associated carbon accounting methodologies, means that as large listed companies seek to understand their true carbon footprint, they have to know – and trust – the carbon emissions of their suppliers, whether listed or privately held. 

The ability of private companies to help listed customers meet their climate commitments will soon become a de facto compliance issue, and for smart business owners and their CFOs, a competitive one.

Hot on the heels of that announcement, the EU passed its long-awaited Corporate Sustainability Reporting Directive on 11 November. The new EU reporting requirements will apply to all large companies, whether listed on stock markets or not. Non-EU companies with substantial activity in the EU, with turnover of Eu150 million, will also have to comply. Importantly, the directive states that “financial and sustainability reporting will be on an equal footing and investors will have comparable and reliable data.”

Finally, in his flying visit to Egypt and COP27, President Biden announced, also on 11 November, a raft of climate-related commitments and actions, designed for both international and his local audiences. For this readership, the main point of interest is that all major Federal contractors are to "publicly disclose their greenhouse gas emissions and climate-related financial risks and set science-based emissions reduction targets”, in line with the 2015 Paris Climate accord. 

Two points of note: firstly while the initial cohort of suppliers is for companies with Government sales over US$50million, companies of that size have to work towards reporting on their “Scope 3” emissions, i.e. carbon emissions associated with the goods and services they procure. So, the knock-on effects of this will become significant rapidly. Secondly, all of the above are about uniting efforts and reporting methodologies, particularly aligning emerging and existing protocols, such as the Taskforce on Climate-related Financial Disclosures, supported by the Science-based Targets Initiative, the Carbon Disclosure Project, and more, all linking back to the ISSB, above.

According to PwC’s 2022 report ESG reporting in Australia - change afoot, but are companies ready? a comprehensive study of the ASX 200, 57 per cent of companies have targets and show evidence of monitoring their most material ESG issues. 49 per cent, i.e. 98 of our largest 200 listed companies have declared a Net Zero carbon target – most by 2050. At the same time, of those companies with a Net Zero commitment, only 55 per cent disclose any form of transition plan that will enable them to reach Net Zero. Expect growing pressure for all companies to have Net Zero commitments and to be able to show how they plan to achieve them. 

Of course, ESG is about much more than climate and carbon. 77 per cent of the ASX 200 disclose a gender diversity policy, ‘though only 33 per cent have a Reconciliation Action Plan, which is at least an improvement on 24 per cent in 2021, and indicates another area of growing uptake. We anticipate action being taken on all of the ESG fronts at ever increasing pace. CFOs, at a minimum, will need to understand the value and financial implications of actions across a diverse set of activities and, potentially, be responsible for reporting on them.

However you see your role as CFO, whether or not you choose to reframe that title, the direction of travel is clear. Global efforts to tackle climate change are ramping up and societal demands for accountability from the private sector mean that businesses are having to think in broader ways than ever before.

Many CFOs will have to think more like CEOs of yore. For some CFOs the changes and responsibilities falling upon them will be incredibly exciting. For those who want to stick to their traditional knitting, their black and red yarn is going to look distinctly tie-died.

We’re at your side, with the insights and solutions you need to stay fit for growth - helping you move forward at the right pace.

For a more detailed discussion, please get in touch with your PwC advisor or contact:

Tim Hall

PwC | Private | Partner - Tax, Melbourne, PwC Australia

+61 416 132 213


Tsae Liew

Partner, Sydney, PwC Australia


Sarah D'arcy

PwC | Private | Partner, Parramatta, PwC Australia

+61 434 361 223


Alexander Pocock

PwC | Private | Director, PwC Australia


Toby Kent

Partner, Energy Transition, ESG Lead PwC Private, Melbourne, PwC Australia

+61 439 031 253