Hello, and welcome to the first edition of CFO Brew, the latest newsletter from Morning Brew made for all you finance pros. Just to make something clear from the jump: No, you don’t have to be a CFO to read and appreciate this newsletter. Finance pros from all sectors—and plenty of people who work adjacent to their finance departments—will find news and insights to help them keep up with the competition and make better decisions for their companies.

Please send us feedback on what you think works best, where we can improve, and what else we could add.

I’m Kim Lyons, former deputy news editor at tech website The Verge. Also on our team is Drew Adamek, who most recently covered accounting, finance, and fraud at a CFO-focused magazine, and Kristen Talman, who joins us from the Financial Times, where she covered environmental, social, and governance (ESG) issues.

We tried to keep the mission statement short and inclusive, with the goal of helping all corporate finance professionals navigate their constantly evolving industry by delivering the latest news and insights twice each week.

There’s a lot of excellent financial reporting out there, but it doesn’t always feel inviting or accessible to a general audience. We’ll strive to provide value for the seasoned finance chief, the newly minted MBA, and every corporate financial professional in between.

We recognize that the job of CFO is no longer just about crunching numbers and allocating resources; there are new staffing scenarios to budget for, new security threats to guard against, and a workforce that demands transparency and accountability from employers, especially when it comes to how companies spend their financial and social capital.

We know we’re competing for space in your inbox, and we’re going to do everything we can to ensure this newsletter will be a must-read twice a week.—KL

Gone are the days of a backwards-looking CFO tasked with capturing past performance. Today’s CFOs are being called on to be future-focused strategic leaders who have a lot more responsibility—and expectations—than just crunching the numbers.

“The CFO of 20 years ago—or 15 years ago—was helping you look out the rearview mirror of your car,” said Ben Kessler, CFO and COO of 66Degrees, a Google Cloud computing advisory company headquartered in Chicago. “Now, it’s more about scaling and growing a business than it is just doing accounting activities.”

Changes and disruptions have rocked the business world at a dizzying pace over the last 10 years. Accelerating technological advances, worsening climate change, widening global inequality—not to mention a global pandemic, a ground war in Ukraine, and a looming recession—have made the world a lot more unstable.

And all this uncertainty and upheaval has helped to radically change the role of the CFO.

“The CFO is going to handle more business-oriented duties…than we’ve ever seen before,” Josh Crist, co-managing partner at Crist Kolder Associates, a boutique search firm that focuses on CFO and direct-report placement, told CFO Brew. The firm publishes an annual report on executive turnover in Fortune 500 and S&P 500 companies. “We are essentially bringing on a CFO that doesn’t have the deep technical knowledge that you saw CFOs have 10–15 years ago.”

Instead, companies are hiring versatile CFOs with a deep understanding of, and broad experience with, multiple parts of a business—not just finance, according to a recent Deloitte CFO Insights report.

An April survey by McKinsey found that not only is the CFO’s role expanding, but they’re taking on responsibilities once considered part of the purview of a company’s CEO or COO.

“The message to finance professionals is that the breadth of skills required, the knowledge base you can gain, the types of roles you should aspire to play—that canvas is broader today than it ever was,” Ankur Agrawal, McKinsey partner, wrote in the study.

So amid all the disruption, and in addition to their traditional responsibilities of tending to their company’s financial health, CFOs are also driving digital transformations and becoming the organizational shepherds of data.

And, CFOs have more direct reports than ever before as well. Between 2018 and 2021, the McKinsey survey found that in addition to a 10% increase in the number of people working on mergers and acquisitions, there was a 4% increase in the number of IT personnel and a 7% increase in cybersecurity employees who report to the CFO.

Along with more organizational oversight, businesses are looking to CFOs for data-driven strategic partnership, according to Deloitte. CFOs are being called upon to use their financial acumen, understanding of their company’s operations, people, market conditions, and data analysis to drive strategic decision-making. Read more here.—KL, DA

In March, the SEC released a proposal for a new rule that would require publicly traded companies to disclose their greenhouse-gas emissions alongside annual reports and other mandatory filings. The comment period for the proposed rule—which is still years away from being finalized—closed June 17, and many companies took the opportunity ahead of the deadline to provide heated criticism.

As part of the SEC’s efforts to crack down on “greenwashing,” under the proposed rule, companies would have to have some of their reporting about emissions independently certified. Since March, the SEC has received more than 10,000 comments from companies, stakeholders, trade groups, and members of the public.

The comments expressed concerns about the potential increased costs of implementing the provisions of the rule, the flood of data they would have to contend with, and the complexity of what are known as scope 3 emissions, which encompass a company’s indirect effects on climate as part of its supply chain. A company with at least $75 million in equity shares would have to disclose scope 3 emissions if it has set a target or goal for greenhouse-gas output.

Nasdaq, the US Chamber of Commerce, and corporations including Dow Inc. urged the SEC to change, or even halt, the proposal. While the objections of a business-lobbying group like the Chamber of Commerce and a chemical company like Dow may not be all that surprising, even some early supporters of environmental, social, and governance (ESG) initiatives have found fault with the SEC’s approach. BlackRock, an institutional investor that has urged companies toward sustainability, wrote that while it supports the SEC’s overarching goal, it claims the proposal could lead to heightened compliance costs and reduce the consistency of disclosures to the public, which could cause confusion.

As You Sow, a nonprofit in the ESG space, went so far as to call on the SEC to require scope 1, 2, and 3 emissions reporting, a much more comprehensive approach. “Banks and other financial-system participants need such data to assess and reduce climate-related risk exposure and reduce their own contributions to climate change,” the organization wrote in its comment.

A survey by the SustainAbility Institute by ERM found that corporate issuers will need to spend $533,000 annually on climate-related disclosure. The cost for institutional investors could average as high as $1,372,000 annually “to collect, analyze, and report climate data to inform their investment decisions.”

The comment period was the latest marker in the fight toward pushing corporations to disclose their climate risks. Read more here.—KT

Another hike: As the Biden administration struggles to rein in inflation, Federal Reserve Chair Christopher Waller said he supports raising interest rates by 75 basis points in July for the second month in a row, and suggested a hike of 50 basis points is “probably” coming in September. The next Fed policy-setting meeting is slated for July 26–27. (Reuters)

What are the odds: The New York Times examined the likelihood that the “rare” audits from the IRS that former FBI director James Comey and his deputy Andrew McCabe received was merely coincidence (rather than spurred by former President Trump’s anger toward them). (the New York Times)

Doing the math: A Senate Finance Committee report criticized the tax structure pharmaceutical company AbbVie uses to report sales of its arthritis drug Humira in the US. (the Wall Street Journal)