Strengthen Your FP&A Team to Overcome ESG Challenges

AUTHOR: JENNIFER LOUGHRIDGE

PRINCIPAL CONSULTANT

Jennifer is a Senior Executive Finance professional with 22+ years of global experience. She is a leading expert in Finance Transformation, ESG and Continuous Improvement, with a strong focus on Strategy, Performance Management, Business Partnering, Commercial Decision-Making, Corporate Governance and Valuation.

As ESG (Environmental, Social, and Governance) factors move from the periphery to the core of corporate strategy, finance leaders are being called upon to integrate ESG into the heart of planning, forecasting, and performance management. For FP&A professionals, this shift presents both a challenge and a strategic opportunity.

Why ESG Matters to Finance

Finance teams are no longer just stewards of capital—they are strategic partners in driving sustainable value. ESG data is now influencing:

Capital allocation decisions
Risk-adjusted forecasting
Investor relations and reporting
Cost of capital and access to funding

With regulatory frameworks such as the CSRD, ISSB, and SEC climate disclosures gaining traction, ESG is not only a compliance imperative but also a powerful lever for gaining a competitive advantage.

ESG in FP&A: Practical Applications

1. Scenario Planning with ESG Variables

Use Case: A manufacturing firm models the financial impact of carbon pricing under different regulatory scenarios, adjusting investment plans accordingly.

Finance Role: Creating and analysing the scenarios to feed into the investment planning process.

2. Sustainability-Linked KPIs in Forecasting

Use Case: A retail group integrates energy efficiency and waste reduction targets into store-level P&Ls.

Finance Role: Ensuring both financial and non-financial results are used to drive performance and incentives.

3. Capital Allocation with ESG Lens

Use Case: A utility company prioritises grid modernisation and renewable energy projects based on ESG-adjusted ROI models.

Finance Role: Ensuring valuation includes financial and non-financial impacts and risks.

4. Integrated ESG Dashboards

Use Case: A global consumer goods company develops a unified dashboard that combines Scope 1–3 emissions with EBITDA and working capital metrics.

Finance Role: Defining and producing the dashboards based on financial and non-financial metrics.

Key ESG Challenges for FP&A Teams

Process: ESG processes are often not robust or timely enough, or linked to financials where needed
Data Integrity: ESG data is often fragmented, qualitative, and lacks standardisation.
Tooling Gaps: Legacy systems may not support the integration or reporting of ESG data.
Capability Gaps: Finance teams need upskilling in ESG frameworks, materiality assessment, and sustainability analytics.
Risks & Controls: ESG processes often lack auditability. Process risks and the associated controls can be lacking.

How Loughridge Transformations Supports FP&A Teams on ESG

At Loughridge Transformations, we partner with finance organisations to embed ESG into the DNA of FP&A. Here’s how we help:

FP&A ESG-Ready Operating Models

We design future-fit FP&A organisations that integrate ESG into planning cycles, performance reviews, and investment governance, ensuring that finance teams are equipped to manage ESG data i theiromplicey’sSducisnsn-making processes effectively.

ESG Data & Technology Enablement

Our team helps clients design and implement ESG data architectures, integrating sustainability data into existing EPM and BI tools. We also advise on automation and AI to streamline ESG data collection and reporting.

Updated Risk Reviews

We support the development of an updated risk management process which reflects climate risk, regulatory shifts, and social trends.

FP&A ESG Capability Building

We deliver change programs to equip finance teams with the skills to interpret ESG data, engage stakeholders, and drive ESG-linked value.

ESG Reporting & Compliance

We guide clients through CSRD, ISSB, and SEC disclosure and reporting requirements, ensuring finance-led ESG reporting is accurate, auditable, and investor-ready.

The ESG-Driven Finance Function

The future of FP&A is not just digital, it’s sustainable. Finance leaders who embrace ESG as a core planning dimension will be better positioned to manage risk, unlock capital, and drive long-term enterprise value.

The Loughridge Transformations team stands ready to help you lead that Finance Transformation.

Let’s collaborate to develop your FP&A team and ensure ESG is well-positioned in your actuals, forecasting and planning processes. Contact us to discover how we can partner together.

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