Topsoe: A green mandate for Finance!

A thorough transformation towards a completely green business model and increased focus on sustainability give Finance the role of a change agent at Topsoe. Their method and toolbox, execution power, and advisory role are now considered in a new and socially relevant light. Since financial expertise becomes crucial to ensure direction and progress that can support the transformation. In this interview, you can read which impact this has on Finance's work at Topsoe as well as on its mandate and responsibility for the commercial strategy.

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Dynamic, conscientious, and visionary. These words encapsulate the ongoing discussions we have had with Karina Sundbæk, VP Group Finance & Facility, and Casper Bille, Head of Financial Controlling & Accounting at Topsoe, since December 2022.

We have visited them at Topsoe's headquarters in Kgs. Lyngby north of Copenhagen to hear about the strategic decision made to change the entire business model. A decision they have made with the desire to further develop existing products and create new ones exclusively from a green perspective. And not least – how Finance must, in this context, play a decisive and business-oriented role in supporting the same strategy.

Finance is to function as a driving force and sparring partner across the organisation when it comes to understanding, planning, measuring, and adjusting Topsoe's transformation towards a completely green business model.

The discussions are the starting point for this interview, where you learn how Finance proactively and strategically addresses the interesting role as a change agent – right at the forefront in the driver's seat at Topsoe.

When talking with Karina and Casper, there are no airy promises. It is, after all, not characteristic of either Topsoe or its Finance function. They work according to the motto: ‘Make Progress. Not Promises’, and that's about creating progress - internally, at the customers, and in society.

And Finance has been given the role and responsibility as a change agent to set the frameworks that will ensure progress. This is in keeping with the DNA that is so characteristic of Finance. A DNA that ensures that Finance has the competencies and the toolbox required. And not least – the cross-sectional insight that can ensure a holistic collaboration between the involved professions.

A fact that both Karina and Casper are aware of and proud of, which immediately fills the room with enthusiastic energy when we, once again, start talking about Topsoe's transformation.

“In brief, we are a company that has the technologies needed to go through a green conversion. And ever since Haldor Topsøe's establishment of the company back in 1940, our mission has been to create products intended to support and help in the future", Karina begins our talk.

“Thus, you may say that it's rather fundamental to who we are as a company to make the world a better place. Today, we transform this into making the world a greener place since the climate crisis is the greatest challenge faced. In practice, this means that the products developed by us today should be green and help society solve the climate crisis."

“That's why our business strategy is to become market leading in the green transformation. And in this process, we are looking for ways in which to optimise Topsoe in a green perspective, which should be supported in all corners of the organisation and its business processes. And this will require something completely new and more from us in Finance. If I were to put it in a nutshell, we are now to manage a role and an associated mandate that has not been seen in Finance previously. And that's extremely interesting and binding," Karina says enthusiastically and continues.

“Because one thing is that Finance is to help support with legislative and compliance issues, for example, in connection with the coming ESG requirements. But I also consider them a golden opportunity to make our expertise relevant at a business strategic level," she brings home her point.

Karina and Casper say that it's extremely motivating that Finance gets a greater and more recognised role to play, not least due to the increased green focus - not just in Topsoe, but in society in general. They both experience how their expertise contributes to a greater purpose (both internally and externally) and how the raison d'etre of Finance is strengthened.

Karina gesticulates while explaining: "In the future, financial expertise will be considered in another way. And what we bring with us in our toolbox has been rediscovered because we contribute to an important agenda in society - through our expertise. Thereby we become a greater part of the commercial strategy in Topsoe than ever before and, consequently, we get more room to act and are invited to the decision table to a greater extent."

But, it also makes demands on Finance.

Though it may sound like quite a big bite for Finance in Topsoe, Karina and Casper warmly welcome their new role and responsibilities.

“We are required to assume a consulting role in all areas. And we are, not least, required to revisit the entire financial value chain, thereby ensuring that Finance is capable of supporting the green business strategy in the best possible way - both strategically and operationally."

“We've already started," Karina smiles and continues: "We have had the initial talks about the focus and direction of the plan that is to help us support the new business strategy. We've been given a great opportunity. And that's why we have acted proactively and sought sparring to have our focus areas and associated financial levers specified in a roadmap."

“The next step will be to revisit all the headlines of the focus areas together with the management group to map and unfold the underlying activities of the very same roadmap. So all our KPIs are in place and we expect to spend all of 2023 fine-tuning the plans. And subsequently, we'll implement and execute on the basis of these," Karina emphasizes.

An interesting aspect of the work faced by Karina and Casper is that everything is interconnected. The majority of the initiatives needed to execute and succeed with the individual focus areas and the strategy in its entirety cut across the focus areas and mutually affect each other.

This is also reflected in the roadmap forming the basis of future discussions with the management group. All proposals for initiatives have been combined into five levers cutting across the five defined focus areas.

“Among the main elements considered is long-term financial planning, where we have a sound basis, but pay attention to whether we'll have new and changed needs as the strategy unfolds."

“Then, there's business partnering, which we renewed in 2021 with increased focus on how to support the new business model in our reporting. In 2022, we have also focused on our changed business needs and on how to support that through green loans and subsidies from, i.a., the EU, etc. Because the thorough, green business profile and conversion make new potential subsidies available. But, in this connection competences are needed to handle and drive the process. And, subsequently, a process should be established for managing the reporting and application requirements that access to these means give rise to," Karina says before she continues the explanation.

“Concerning the ESG agenda, we are collecting the existing elements and building the foundation on the data side. We have not been just as focused when it comes to incorporating ESG in the current system, but it will be fully integrated in the future. Previously it has been more of a manual process."

She picks up her point and adds: “The ESG requirements is a positive lever for the work that we are already doing - we would have reported on ESG key figures no matter whether it had been a requirement or not. But what is good about the requirements is that it will now be easier for us to use the ESG key figures for comparison since all companies will now be operating on a level playing field. And it will be an advantage to us since it will make a lot of opportunities available to us. Actually, we expect to be ready as regards the EU taxonomy in late 2023 and as regards catching all data in the right way in 2024."

Karina tells us that, in early March 2022, Topsoe succeeded in publishing the first integrated annual report. They have integrated their sustainability reporting in the annual report to set a new transparency standard. Thus, they underline that sustainability is at the core in Topsoe.

Karina smiles and elaborates: “We will continue to fine-tune the report to give our stakeholders a better understanding of our financial and non-financial factors and - not least - our performance and value creation."

“That's why sustainability activities become a still more integrated part of our business. And in 2022 we have succeeded in meeting our goal to help our customers reduce greenhouse gas emissions by 16 million tonnes. This corresponds to 40 per cent of Denmark's annual greenhouse gas emissions. We have also committed ourselves to becoming 'net zero emitters' by 2040 across our value chain," Karina says enthusiastically before continuing.

“The process integrating the reports has been interesting. It required us to strengthen our collaboration with various specialists and our teams in Sustainability, Communication, and Finance. Quite simply to give us a common language and a common understanding of what it takes to communicate the figures publically as a part of the annual report. The next step consists in having an auditor validate our ESG data, which makes much greater demands for the data and associated descriptions of our accounting practice."

“But the view on all the initiatives in all focus areas is that there'll be no half measures. We can and must do it right the first time. 'One set of data' and no thanks to gaffer tape. Thus, we can also make the data speak more clearly. And this also creates the best basis for revisiting our roadmap and the plans as dynamic documents that we adjust and fine-tune, and which make us wiser during the process. I think that it's the best way in which to move forward, while at the same time ensuring that the new insights generated are brough into play."

“The chance of making a distinct impact as a financial talent in Topsoe has never been greater than right now," Karina says enthusiastically.

“And the green transformation also creates a need for other skills that are, in some areas, far more specialised than previously. Since Finance's new role and responsibilities will give us more surfaces of contact with the business as well as interaction with many different types of people. Thus, finance profiles will have new opportunities if they want to work business-minded and strategically in areas where they need to have a desire and ability to make demands on the business in terms of quality,  reporting and - not least - to ask more questions. Especially, to be able to meet the extra layers of compliance that we are faced with," Karina says.

And she continues her point with an example: "We depend on knowledge to be had from others in the organisation. And, naturally, we are not experts when it comes to reading all types of data, and this makes new demands on our way of communicating - both inside and outside Finance. Every day, we have to talk with skilled super specialists and turn their complex knowledge into meaningful figures. So, we must be able to communicate why we ask for the figures so that they also understand what we ask for and why it is important."

“On the other hand, specialists with skills within green financing via, for example, subsidies from the EU and the US, risk identification, ESG reporting, and digitalisation of Finance are high on the wish liste both now and in the  future."

Karina tells us how the new requirements for diverse, financial competences will, in general, change the way they collaborate in Finance.

“Several different standpoints will contribute positively to more sympathy for other perspectives, and this will result in more reflections and contribute to our ability to challenge each other at a higher level. And I find this extremely rewarding."

Casper and Karina smile at each other, and the last remark before ending our talk is: "It's motivating to be such an important player in this transformation. It gives us a huge sense of professional pride that we as a company dare defend it outwardly. That we dare stress that we are serious when we say that we must have a green business model. And not least - across the company together -  place our hands on the burner. In my view, it has never been this interesting and binding to work in Finance."