Companies face mounting (and sometimes conflicting) pressures to maintain environmental, social, and governance (ESG) efforts while respecting budget constraints and reacting to geopolitical shifts. Among these priorities – underscored by recent data revealing that in 2024 the world crossed the 1.5ºC global warming threshold for the first time – a commitment to long-term sustainability should be rising.
In common with other sectors, the luxury retail segment is experiencing a slowdown. However, regarding sustainability, Chanel is determined to maintain focus. “We’re in the club of companies that are not changing their commitments and are maintaining the pressure and investment in sustainability,” states Chanel Global CFO Phillipe Blondiaux. “For us, it’s a long-term journey.”
Blondiaux’s use of the exclusive term “club” is telling. Amid ongoing business uncertainty, some companies are pulling back. “You’ve seen many companies – less profitable ones, in particular – reviewing their commitments significantly,” he says. “It will be revealing to see which ones are truly dedicated to long-term goals and which treat it as a passing trend.”
Some European governments advocate for a softening of non-financial reporting regulations, arguing that stringent ESG norms put companies at a competitive disadvantage.
The tightening European regulatory landscape reinforces Chanel’s stance. The Corporate Sustainability Reporting Directive (CSRD) requires large companies that are already subject to the Non-Financial Reporting Directive (NFRD) to start reporting in alignment with the CSRD guidelines starting from fiscal year 2024, with reports due this year.
Blondiaux views this as a necessary development. “For years, I’ve been frustrated by the poor quality of sustainability reporting. Greenwashing is rampant, and [reported] numbers often lack credibility,” he says. “The CSRD is a catalyst for harmonization, clearer definitions, and setting meaningful targets.”
But not everyone shares this enthusiasm. Some European governments advocate for a softening of non-financial reporting regulations, arguing that stringent ESG norms put companies at a competitive disadvantage. Blondiaux opposes this view: “Without these regulations, I fear we’d be three to five years behind where we need to be. [Chanel is] working very hard to be ready to report our numbers in 2026.”
“Chanel CFO Philippe Blondiaux emphasizes the significance of nonfinancial metrics in defining performance.”
From driving accurate reporting to fostering long-term value, CFOs can exert a profound influence on their organizations’ approach to sustainability.
“Finance has a unique role to play in ensuring data quality,” Blondiaux explains. “Just as we ensure the integrity of financial data, we must apply the same discipline to ESG data.” The stakes are high. With the CSRD mandating assurance of key ESG disclosures, the credibility of a company’s sustainability metrics can make or break stakeholder trust.
Blondiaux also emphasizes the significance of nonfinancial metrics in defining performance. “Traditionally, performance was assessed using metrics such as cash flow and earnings before interest, taxes, depreciation and amortization,” he says. “However, moving forward, it must increasingly incorporate non-financial reporting data.”
“I am working with finance teams to take ownership of this shift, so that business reviews evaluate not only financial performance – top line and bottom line – but also social KPIs, value chain metrics, and environmental indicators, with equal weight. As a finance team, we are uniquely positioned to integrate these metrics into our processes.”
The expanded scope of the CFO role offers a more dynamic and appealing career path. “Let’s be honest, what’s been new for the finance function in the past decade?” Blondiaux asks. “Sustainability, in particular, offers a broader scope that makes the role more engaging and impactful.” He emphasizes the importance of leading by example. “At Chanel, we have nearly 1,000 finance professionals globally,” he explains.
“It’s crucial to communicate with conviction and passion. Without those, it’s challenging to bring people on board. To embed this requires time and persistence. For instance, despite addressing sustainability topics consistently over the past two to three years, they are not yet fully ingrained in our team. Repetition and clear messaging from leadership, particularly in finance, are essential to ensuring alignment and understanding across the organization.”
Strong collaboration between finance and sustainability teams is essential. However, as teams become involved in each other’s traditional remit, agreeing and respecting lines of demarcation will be crucial. For example, sustainability teams may be wary of finance trying to set their targets for them. Clarifying roles and responsibilities can help build a productive partnership. At Chanel, the division is clear.
“It’s the responsibility of the sustainability team to set targets and deliver the programs to achieve them,” Blondiaux explains. “However, finance plays a critical role in ensuring clear and accurate reporting, defining measurable targets, and tracking performance and progress. The roles are highly complementary, and I firmly believe that robust reporting is essential to the overall success of these initiatives.”
Blondiaux believes that long-term delivery of targets should take precedence over short-term cost considerations. “The priority is meeting the targets we’ve committed to, regardless of the cost,” he says.
The role of the board is critical in maintaining this focus. “If boards prioritize only financial metrics like EBITDA, climate goals will inevitably take a back seat,” he warns. “Climate numbers cannot be secondary.”
CFOs are instrumental in quantifying the value of sustainability initiatives, Blondiaux explains: “When evaluating investments such as a new factory, it’s no longer just about financial returns. You need to measure the carbon impact.”
This dual approach embeds sustainability considerations into every major decision. “It’s about integrating financial and non-financial metrics into a combined value case,” he confirms.
From ensuring data integrity to driving cultural change, CFOs have the tools and influence to lead their organizations toward a more sustainable future.
As businesses navigate the complexities of sustainability, the CFO’s role will be central to strategy development. From ensuring data integrity to driving cultural change, CFOs have the tools and influence to lead their organizations toward a more sustainable future.
Blondiaux sums it up best: “Sustainability is about redefining what success looks like. It’s no longer just about financial performance.”
For companies committed to ESG, staying focused on core priorities amid uncertainty is not just a test of resilience. It’s also a testament to purpose. And for CFOs, it’s an opportunity to leave a lasting and meaningful legacy.
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