Keynote speech by Ingrid van Wees, ADB Vice-President for Finance and Risk Management, at the Annual International Association of Financial Executives Institutes World Congress on 11 December 2020.


Mr. Francisco, Professor Valente, Dr. Manatabe, fellow financial executives: I am delighted to address this distinguished group of financial executives and professionals.

Let me first offer my sincere congratulations to the International Association of Financial Executive Institutes on its Golden Jubilee.

For an impressive 50 years, the Association has advocated and advanced a global understanding of ethical financial management. Thank you for these contributions.

I would also like to commend you for formulating and launching the CFO Declaration reflecting the Pivotal Role of the CFO. It is a truly important and thought-provoking manifesto. And I could not agree more with your conclusion that as CFOs, we hold the role of Chief Financial Officers.

New and bigger risks

Businesses today are challenged to look beyond the traditional threats, as external risks are increasing and global mindsets evolving with immersing trends.

For centuries, we have been building and expanding our economies fueled by free services provided by the planet’s ecosystems. However, we have now reached a point where the roles need to reverse. In order to maintain the essential ecosystem services, such as stable climate regulation, clean aquifers and fertile land for agriculture, the businesses and our societies need to start actively supporting the planet’s ecosystems. 

Earth’s ecosystems are currently in a state of flux triggered by years of air and water pollution, land degradation, and reduction of biodiversity. We are seeing more frequent and severe storms, unusual droughts followed by record-breaking rains and floods, and an increased transfer of zoonotic viruses to humans. All are affecting our families, economies, and businesses you lead. 

With the planet’s debt collectors on our doorstep, time has come that our economies start integrating a reduction of indebtedness to our planet’s natural resources in our regulations, policies, and businesses.

Global leaders have taken note of this change: January 2020 was the first time that the top 5 risks of the Global Risk Report by the World Economic Forum, were exclusively environmental – including climate action failure, biodiversity loss, extreme weather, and water crises. Cyber and data-related risks, economic risks, involuntary migration, and terrorist attacks have faded into the background because the potential scale and impact of the ecosystem risks are dwarfing the other, more familiar external risks.

COVID-19 showed us that a humble virus can wreak havoc to our global economies on an unprecedented scale, not yet seen from global financial crises, cyber, or terrorist risk attacks.

If we are to strengthen the resilience of our organizations, our environment, and our people, we must make a significant shift in how we view and prepare for these external risks.

As Chief Future Officers, your leadership is critical in strengthening your organization’s future resilience and relevance which can be achieved:

  • by reducing and repaying our indebtedness to mother nature,
  • by innovating your products and services, with use of science and technology to provide solutions for a new normal with a potential additional benefit of an early mover advantage, and
  • strengthening your contribution to the maintenance of society’s cohesion and inclusiveness.

What might be the consequences for this change in risk perception and focus on our business?

Governments and civil society organizations will nudge businesses into acceleration of this transition. Many of the initiatives will have financial repercussions. We see the use of various instruments such as:

  • Preferential treatment for sustainable businesses and desired investments in the form of tax rebates, access to cheaper capital or licenses, and income support such as subsidies;
  • But also disincentives in the form of pollution, environmental and emission charges and limited access to certain resources such as capital. To this end, the European Union is considering “brown taxonomy” criteria that would label certain activities as environmentally harmful with a view to deter investments and financing of these activities. You might be aware that it has already become increasingly difficult to finance e.g. coal fired power plants with assistance from large international commercial banks.

There might be new costs on the horizon with schemes like expanded producer responsibility coming into play. Potential liabilities might be retroactive. Fossil fuel energy companies in the USA are aware of potential future liabilities and trying to negotiate a future carbon tax in exchange for a moratorium on liabilities.

Access to talent is expected to be increasingly determined by your organization’s public standing and ESG rating.

There are many incentives to transit from conventional to future thinking in the C-suite such as avoidance of major challenges to achieve your financial goals in the face of increasingly volatile operating environments.

Future-proofing organizations

With these challenges on our radar screen how can we contribute to the future-proof our organizations?

I have three areas for consideration:

First, redefine your stakeholders.

As responsible organizations, we need to revisit and redefine our stakeholders to ensure inclusion of all critical service providers, the society in which we live, and future generations.

Important stakeholders such as the ecosystems providing essential services have for too long lacked a seat at the table due to the simple absence of a representative. Including them will not only enhance our governance and insights about current and imminent risks, it would also allow for timely adjustments of staffing needs, business models, and investments. You might obtain a widely supported and secure license to operate and expand.

Second, rethink the definition of your organization’s success and targets.

Profitability or shareholder value has since long been replaced with “stakeholder value.” Millennials and Generation Z are putting a premium on your organization’s contribution to the environment, quality of work, ethics, and social well-being of communities.

Financial investors are increasingly interested in sustainability and steering clear of future liabilities and stranded assets. Organizational targets reflecting these interests can become a key element of future proofing.

Third, let us recognize that prevention is often cheaper and more effective than a cure.

COVID-19 is a good example. Scientists estimate that the cost of preventing the next pandemic from a zoonotic disease by 2030 would be only 2% of the global costs of the COVID-19 pandemic.1 Some of the funds saved can be invested in protecting and monitoring pristine forests and preventing wildlife trade where diseases emerge.

Business examples are the installation of flood mitigation systems which augment up-front costs but reduce future risk of much higher financial, human, and business costs should a disaster strike.

Recognizing this reality, it is important for your organization to analyze how external risks affect your business now and in the future. Since your business may need to change to survive, it is important that you keep asking what you, as senior management, can do now to future-proof your organization and put it on a firm sustainable footing.

Many have already done so. For example, Microsoft moved from operating systems to cloud services after missing out on smartphones. Singapore has been investing to become Asia’s technology hub. Royal Dutch Shell and BP are leaving oil and gas behind to become renewable energy powerhouses. Some investors might be wary about such decisions today, but history may proof you are right.

As Chief Future Officers, each of you can help your organization transform into a sought-after, inspirational enterprise, setting a new level of aspiration to truly become a leading organization of the future. In doing so, you will attract the best talent, access the most beneficial terms for finance, and become the business partner of choice to other global business leaders.

Dr. Sylvia Earle, the famous marine biologist and former Administrator of the National Oceanographic and Atmospheric Agency put it very clearly:

What we do, or fail to do over the next 10 years, may well set the course for the next 10,000 years on planet Earth.


Fellow CFOs, I am convinced that we are up to the challenge when we get organized. With the help of the ingenuity, creativity, and energy of all, both men and women, in and outside your organizations, we as Chief Future Officers can build a resilient, inclusive, and sustainable future in which both human and nature not just survive, but thrive.

Once again, congratulations on your 50 years of success, and may the next 50 years see us all working hand in hand – in our communities, regionally, and globally, and in good symbiosis with the planet’s ecosystems.