Treasury Today September/October 2021

Published: Sep 2021



Treasury’s climate challenge

The latest message from the Intergovernmental Panel on Climate Change, released in August, was a dire warning from scientists on the impact of climate change. It has focused attention on the UN’s COP26 conference in November and the urgency to get gathered countries that have adopted the Paris Agreement to collaborate on cutting emissions to sign up to new, tougher cuts in Glasgow to try and decarbonise the world.

As the politicians get ready to wrangle, this edition explores one growing treasury’s role in helping companies meet the challenges of climate change. Corporations are setting increasingly bold environmental goals, yet these promises are rarely mirrored in their financial statements, making it difficult for investors and other stakeholders to see the relationship between a company’s financial and sustainability performance.

New financial reporting standards due to be unveiled at COP26 aim to change this, laying out how companies should report to give as clear a view of corporate sustainability as they currently do financial performance in one, integrated report. Moreover, the different and acronym-heavy measurements and reporting standards surrounding ESG will be replaced with a standard norm. Going forward, treasury and finance will play a growing role, with sustainability teams incorporating these new standards and understanding how changes in corporate strategy and the impact of regulation will translate into the figures they use to prepare their financial statements.

Our Corporate View with Anthony Buchanan, Head of Treasury at Japanese brewer Asahi Europe, illustrates where else treasury can lead on sustainability, like the brewer’s working capital support of a supplier wanting to finance a factory closer to an Asahi brewery to cut logistics costs. Elsewhere, his treasury has signed a ten-year electricity contract in Poland, wholly tied to wind in an offtake deal that helped the renewables farm finance its infrastructure build.

This edition also explores how companies can minimise FX volatility in current market conditions and the frequency with which they should review their hedging strategy. We also take a long look at the latest cyber threats in the wake of the pandemic, and ask a group of experts what impact long-term working trends hold for treasury.

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