Skeptical by nature, finance professionals were never too eager to jump on the environmental bandwagon for one reason alone: there is no green in going green. Increased R&D budgets and growing overhead cost resulting from recycling efforts rarely can be passed to customers, as the reality shows that an average consumer will rarely pay premium for a green product.  But the reality also shows that the demand for “green business practices” is rapidly increasing, and, as a result, investors today want to know not only about your bottom line but also in which manner it was achieved. Thus, CFOs and CEOs alike face the challenge – how to close the gap between maximizing the profit and doing so in a socially responsible way.

At MMT, we are working toward bridging the gap by linking a corporate sustainability program to financial objectives. Environmental issues do create commercial opportunities, and it is finance’s job to come up with systematic consistent ways to measure those opportunities for potential value creation and profit maximization.

Use your best financial skills, such as risk assessment, to link environmental strategy to financial impacts. Use your healthy financial skepticism to insure that business fundamentals, such as quality of products and services, are not abandoned. Consumers may be reluctant to pay premium for green-certified products but they will also not accept inferior product simply because it is green. Your environmental investments should provide a return – no different from any other business investment. For example, switching to lighter weight substrates saves shipping and direct labor cost; and establishing appropriate recycling programs reduces the risk of future non-compliance. Finally, financial disclosure methods should be applied to insure that any claims made by your company for green products are accurate, appropriate and sustainable.