The WEF says ESG makes financial sense. But does it really?

In a recent piece titled Why ESG is now a financial imperative, the World Economic Forum makes a clear and compelling case: ESG, once considered optional or superficial, is now central to long-term value creation.

From investor pressure to regulatory mandates to shifting stakeholder expectations, the logic is undeniable. ESG has evolved from moral narrative to financial strategy.

But as a CFO operating in the trenches of enterprise risk, capital deployment, and board-level reporting, I see a more complex picture. Yes, ESG is a financial imperative. Bu tmost companies are still structurally unequipped to manage it as such.

So the question isn’t whether ESG matters. The real question is: Can we operationalise ESG in a way that meets the standards of modern financial strategy?And right now, for many companies, the answer is no.

ESG is strategic. But our systems aren’t.

The WEF notes that companies integrating ESG into their business models are better positioned to mitigate risk and seize opportunity. But many organisations are managing ESG data with tools that would be considered inadequate for even basic financial oversight:

• Data is siloed across functions, platforms, and geographies
• ESG performance is measured with inconsistent methodologies
• There’s minimal financial integration, let alone auditability

For a CFO, this is deeply problematic. You cannot model scenarios, allocate capital, or present decision-grade board packs using qualitative disclosures and unverified numbers.

We have enterprise-grade tools for revenue, cost, and risk. Yet for ESG, which is now tied to access to capital, brand equity, and regulatory exposure, we’re using a patchwork of spreadsheets and narrative PDFs.

This isn’t just inefficient. It’s strategically dangerous.

Compliance cost is rising. But value creation is unclear.

The article points out that ESG performance is becoming a determining factor in investor trust and capital flows. This is true, particularly with the rise of sustainability-linked finance and CSRD/ISSB requirements.

But there’s a cost side to the equation too. ESG compliance is expensive:

• Reporting requirements are intensifying
• Verification and assurance processes are becoming mandatory
• Consultancy spend is soaring, often with limited strategic ROI

From a CFO perspective, this creates a growing disconnect:W e're spending more on ESG, but we still can't link that spend to financial outcomes.

This is where ESG must evolve, from cost centre to strategic lever. That means treating sustainability initiatives like any other investment: measured, modelled, and held accountable to performance benchmarks.

Boards need ESG data that meets financial standards

The WEF makes the case that ESG is now a boardroom issue. But many ESG disclosures aren’t yet board-ready:

• They’re unaudited and non-standard
• They lack financial alignment or forward-looking insight
• They aren’t integrated into the enterprise planning cycle

As CFOs, we are expected to bring rigour to reporting, to turn data into decisions. But ESG reporting still lacks the foundations for executive-level scrutiny.

To fulfil its strategic promise, ESG data needs to be:

• Structured
• Assured
• Financially integrated
• Scenario-based

Without this transformation, ESG will continue to sit on the margins of board conversations referenced for optics, but rarely used to shape capital strategy or risk mitigation.

ESG is no longer a CSR issue. It’s a capital markets issue.

The WEF points to a growing body of evidence linking ESG performance with shareholder returns, cost of capital, and investor trust. That alignment creates both opportunity and pressure.

For CFOs, this means ESG isn’t just about sustainability reports. It’s about bond pricing, loan covenants, M&A exposure, and equity positioning.

• Missed ESG targets can trigger pricing penalties
• Weak data practices can undermine investor confidence
• Inconsistent disclosures can open the door to regulatory scrutiny

This is why ESG must move under the direct stewardship of finance. Not to reduce it to numbers, but to make those numbers meaningful, verifiable, and strategically actionable.

The path forward: ESG must be rebuilt from a financial core

If we take the WEF’s thesis seriously, that ESG is a financial imperative, then we must also confront the operational gap between ambition and execution.

What’s needed is a structural shift. ESG must be:

• Embedded into core systems and workflows
• Tied directly to financial models and risk registers
• Governed with the same standards as financial data
• Strategically aligned with value creation, not just compliance

That’s the CFO challenge in 2025. Not to push ESG down the priority list, but to lift it out of the narrative layer and integrate it into the financial and operational heart of the enterprise.

Only then will ESG make sense to the CFO.