Challenges and best practices for CFOs in the context of ESG integration

04/08/2025

Challenges and best practices for CFOs in the context of ESG integration

In the face of increasing regulatory pressure and stakeholder expectations, integrating environmental, social and governance (ESG) factors into a company's financial strategy is becoming not only desirable, but essential. Chief Financial Officers (CFOs) and accounting departments play a key role in this process - not only as guardians of compliance and financial efficiency, but also as architects of long-term, sustainable growth.

Integrating ESG factors into a company's financial strategy poses a number of challenges for Chief Financial Officers (CFOs) and accountants. Their role is evolving to include not only financial management, but also active participation in shaping sustainability strategies

What are the key challenges facing CFOs, Accountants and finance teams?

  1. The complexity of regulation and reporting obligations
    The European Union, through the CSRD and the complementary Omnibus package (2025), requires major companies to report on ESG indicators in an advanced manner - including greenhouse gas emissions, compensation policies, diversity or supply chains, among others. CFOs and chief accountants need to understand the new standards (ESRS) and know how to put them into practice - without compromising a company's financial integrity.
  2. Integrating ESG into accounting systems and chart of accounts
    An example of a practical approach is the creation of analytical accounts dedicated to environmental projects (e.g., "RES spending," "recycling and reverse logistics," "environmental education") to track the impact of ESG on financial performance. Some companies use separate codes in the chart of accounts for projects with ESG impact and prepare additional analytical sheets in Excel.
  3. Managing risk and capital with ESG inmind
    ESG risks also include: regulatory, environmental, reputational. Modern finance departments are implementing ESG risk matrices, integrating them into an organization-wide risk map, and including them in ROI assessments.

What companies were implementing ESG, even before the CSRD came into force?

Polish apparel company LPP SA - implemented ESG reporting in line with GRI guidelines and separated special items in the chart of accounts to analyze the carbon footprint and costs of CSR activities.

Banks have been actively involved in promoting ESG activities. Bank BNP Paribas Poland, for example - includes in its financial planning sheets the effects of CO₂ reductions and their translation into long-term project financing costs.

ING Bank Slaski, on the other hand: this bank actively supports green financing by offering loan products linked to the achievement of sustainability goals. ING integrates ESG indicators into its decision-making processes, helping to promote sustainable investments .

Another example is Tauron Polska Energia, which is developing its own "Green Investment Projects" methodology, in which each investment project is assessed for ESG impact, including accounting and cost impact.

The evolution in planning and financial management in ESG-compliant companies subtracts:

  • Integrating ESG goals into budgeting: Companies are increasingly integrating sustainability goals into the budgeting process, allocating funds for environmental and social projects
  • Green financing: Companies are using financial instruments linked to ESG goals, such as green bonds or loans linked to ESG performance, which promotes the implementation of sustainability strategies
  • Transparency and communication: Regular publication of ESG reports, even if not required, increases investor and stakeholder confidence, highlighting the company's commitment to sustainability .Such reporting can be in line with the voluntary VSME Standard.
  • Integrating ESG into accounting systems and chart of accounts
    An example of a practical approach is the creation of analytical accounts dedicated to environmental projects (e.g., "RES spending," "recycling and reverse logistics," "environmental education") to track the impact of ESG on financial performance. Some companies use separate codes in the chart of accounts for projects with ESG impact and prepare additional analytical sheets in Excel/Power BI.
  • Managing risk and capital with ESG inmind
    ESG risks also include: regulatory, environmental, reputational. Modern finance departments are introducing ESG risk matrices, integrating them into the risk map of the entire organization, and including them in ROI assessments.

Examples of including ESG in the chart of accounts and financial worksheets:

  1. ESG-inclusive chart ofaccounts: Introduce analytical accounts dedicated to costs and revenues related to environmental activities, such as investments in renewable energy or social projects. This makes it possible to accurately track expenses and the effectiveness of ESG activities .
  2. Analytical financial sheets: create financial reports that take into account ESG indicators, such as CO₂ emissions per unit of production or energy consumption from renewable sources. This approach allows monitoring the impact of ESG activities on financial performance and operational efficiency .
  • Example from the chart of accounts:

Controlled expense for construction of renewable energy facilities → 04-3-102/ESG/GREEN
Depreciation of electric vehicles → 07-2-41/ESG/EV
Environmental subsidies → 14-5-08/ESG/DOFINANCING

  • Financial analysis sheets from ESG:

- columns for "Gross Environmental Cost", "Emission Reduction Effect"
- KPIs such as CO₂/t, ESG Investment ROI, Green Payback Time

Integrating ESG into a financial strategy requires CFOs and accountants not only to adjust accounting systems, but also to take a proactive approach to risk management and stakeholder communication. Adopting best practices and adapting to changing regulations will allow for effective implementation of sustainability principles in a company's financial structures

CALL FOR TRAINING - Excellence in ESG for CFOs

On April 17-18, 2025 in Krakow, Poland, we invite you to participate in a specialized training course Excellence in ESG for CFOs, during which:

  • We will discuss the practical challenges of implementing ESG in a company's financial structures,
  • We will analyze legislative changes - including the Omnibus and ESRS package,
  • We will show specific examples of ESG analytical and reporting tools,
  • Together, among practitioners, we will practice approaches to ESG planning in finance and accounting departments.

This is a unique event - dedicated to CFOs, accountants and controllers - giving you real value that you can use the next day at work.

register now - seating is limited!
Email contact: biuro@heuresis.pl
Venue: boutique hotel in downtown Krakow overlooking the Vistula River