Corporate View: Will Thomson, Contact Energy

Published: Oct 2023
Will Thomson, Corporate Treasurer, Contact Energy

Building a treasury toolkit

Will Thomson has built a toolkit of skills that have served him well both as an accountant and a treasurer. Here he explains why sustainable finance is a key part of his role, and how this fits with working for a company that has environmental, social and governance (ESG) concerns at the core of its strategy.

Will Thomson

Corporate Treasurer
Contact Energy
Created in 1996, Contact Energy is one of New Zealand’s largest listed companies with over 550,000 customers across electricity, natural gas and liquefied petroleum gas (LPG) products, supported by a team of over 1,000 employees located up and down the country, all working to help New Zealanders live more comfortably with energy. The company’s focus is on delivering great value, great products and great service to customers. It currently offers electricity, natural gas and bottled LPG, generated through 11 hydro, geothermal and gas-fired power stations. The company is always looking to the future and is constantly trialling new products and service – all inspired by customer feedback.

Will Thomson, Corporate Treasurer at Contact Energy, had quite the journey to get to where he is today. After establishing his career in the UK, he relocated – for personal reasons – to New Zealand. Not one to put his feet up and kick back for a long-haul flight, Thomson went the scenic route. He cycled across Europe, flew to China, cycled along the Tibetan Plateau and down into Laos and Thailand. From there he travelled onto New Zealand where he now lives, in Wellington. Along the way he adapted his toolkit to effectively fix punctures, change tyres and make other tweaks along the way. Similarly, throughout his professional career he has been building a toolkit of skills that serve him well, no matter the situation or extreme the conditions.

These days those skills and tools are being applied to sustainable finance and embedding ESG into the treasury at Contact Energy, a New Zealand company that is committed to decarbonisation, renewable energy and a sustainable future.

Stumbling into treasury

Like many corporate treasurers that Treasury Today Asia speaks to, Thomson did not set out on a career in treasury and stumbled onto its path by chance. He graduated from the UK’s UWE Bristol (University of the West of England) with a degree in Business and Information Systems. From there he took on analyst roles in the financial services industry and then moved into telecommunications. After four years at BT Group in the UK, he wanted to move away from his sales-based role and shifted direction back towards finance, taking the opportunity to qualify as an accountant. He studied for these exams while working for Simpson Spence Young (SSY), a shipping partnership, where he completed the ACCA [Association of Chartered Certified Accountants] exams and worked as a senior accountant.

Thomson explains there was a finance partner at SSY but no treasurer because of the size of the organisation. This, however, didn’t mean there weren’t treasury tasks to do and these usually got distributed among the team. “I ended up doing things like FX [foreign exchange] and FX analysis around the hedging. I quickly realised that I found treasury much more interesting than traditional accounting. I also had a friend who had gone into treasury so I could see there was a clear career path,” says Thomson.

This kind of lucky accident of discovering treasury is quite common among the community of treasury professionals. Commenting on the typical entry point to the corporate treasury world, Thomson comments: “No one does a degree in treasury – everyone stumbles across it!” After stumbling across it in this way, Thomson went on to pursue the Association of Corporate Treasurers (ACT) qualification, which his company supported him to do.

When asked what he has learned from this kind of career switching – between accountancy and treasury – Thomson comments, “I always tried to grasp opportunities. Although the treasurer role was still a small part of the job at SSY – there was just a small amount of cash management and FX risk and no debt capital markets – it was a great opportunity to learn the fundamentals and basics of treasury.”

Now that he’s doing a treasury role, does that mean he needn’t have bothered with the accountancy qualification? Given how arduous and gruelling the ACCA exams are reported to be, does he regret doing them? Not at all, says Thomson. “I don’t think you have to be an accountant to be in treasury – many people come from other areas like finance, banking or law – but ACCA gave me part of the understanding to do this role. Everyone will come to treasury from somewhere else; I don’t regret doing the accountancy qualification because it put me on the path to treasury.”

Also, having a foundation in accounting means that Thomson can communicate from a solid base with his stakeholders. “Treasury is a function that is woven into the whole company. It is a major part of finance and that means looking at the bigger picture and what the rest of the finance function are doing. It is quite valuable to have an understanding of how that works,” he says.

Thomson cites a former colleague who advised him to have ‘more than one string to your bow’, which is something that Thomson took to heart. Nowadays he has several of them with strings of ACT qualifications to his name.

Building the toolkit

In a sense, by doing both accountancy and treasury qualifications, Thomson has been building his toolbox for the long term that will serve him well as he progresses through his career. In senior roles, it is important for leaders to have a solid understanding of the complete picture. Chief financial officers, for example, need to understand cash and liquidity management to succeed in a senior position. And vice versa: corporate treasurers in senior positions need to understand the principles of finance and how the function operates.

The lesson he has learned so far in his career, is “keep your eyes open and look for opportunities. It can be easy to be head down and focused on a set path of the role you are in. I was not looking so much for treasury, but the opportunity came along and I grasped it. I don’t see that as an end to the accountancy but rather it was something I was adding to it. Wherever I have been there have always been opportunities to get involved and get responsibilities and I put my hand up,” he says.

After seven years at SSY, Thomson decided to relocate to New Zealand and spent a year travelling – which included his cycling adventure – and landed in Wellington. After securing a work visa, he took on a role at Chorus, a telecommunications company, where he was the senior group accountant – a role that was mixed with both treasury and accountancy. He was itching to take on a full treasury role and used this time at Chorus to gain experience in debt capital markets. Chorus had domestic bonds, as well as bonds in Europe, and he took the opportunity to learn about instruments such as medium-term notes (MTNs). During this time, he supported the issuances of a NZ$500m retail bond and a €300m MTN.

Given that New Zealand is a relatively small market, there are not that many full corporate treasury roles. By connecting with the treasury community in New Zealand, and going to networking events, Thomson learned of where the opportunities were. He soon learned of a job opening at Contact Energy. He applied for the role of assistant treasurer, got the job, and from there he rose the ranks to become Contact’s corporate treasurer.

No one does a degree in treasury – everyone stumbles across it!

Applying core principles

This was the first time Thomson worked in the energy sector, but he relished the challenge. When asked if a major adjustment was required because of the new industry, Thomson doesn’t think so, aside from learning about the complex pricing of electricity. “One of the good things about treasury is that money is fungible – it is the same in every company. When you have skills in treasury they are transferable,” he says. “Some companies might have more FX risk, for example, but generally it is the same risks you are managing, although you might manage them in a different way. There may be different demands or different ways to measure risks in a country, industry or company, but fundamentally it is not a different language. It is a refinement and flex of the core principles you’ve got in your toolkit and the skillset that has been built up over a career,” says Thomson. “However, knowing which tools to use and how hard to tighten the screws requires a finer judgement – that can come with experience – but you’re not working in a completely different language,” he adds.

Thomson says he likes his current role at Contact because of the variety that it entails. “I like the analytical part of the role and the fact there is a strategic element to treasury and a need to engage with internal and external stakeholders.” His current priorities include focusing on access to capital to support the company’s ambitious growth strategy. “There is a nice mix of technical and personal interaction in this role. And it is challenging being in a strategic role, looking at the enablers of growth and how the risks are changing. It is dynamic, which is really interesting.”

A sustainable future

Thomson also enjoys his role because of the company he is working for and being part of its decarbonisation strategy. The energy company currently has 85% renewable electricity generation and is actively pushing that figure up to 95% as it initiates decarbonisation projects that replace thermal generation with renewable energy.

In mid-August, Contact’s CEO Mike Fuge commented on the company’s progress in this regard: “This year we have taken key steps towards decarbonising our own portfolio and now have a clear path to achieve net zero emissions from our generation operations by 2035. We are committed to doing this in an orderly manner, ensuring security of supply and energy affordability to New Zealanders.”

Sitting in corporate treasury, Thomson comments that “sustainable finance and sustainability products tie in with what our core strategy is about. It feels like I’m in the right company at the right time.”

Contact has publicly committed to decarbonisation and has set out its Contact26 strategy that aims to grow demand for renewable electricity, develop new, flexible energy generation and decarbonise its portfolio. This will be done at the same time as serving its customers well and will be underpinned by the company’s commitment to strong ESG practices.

ESG motivations

When asked about how ESG concerns can be integrated into the treasury, Thomson says, “The primary function of treasury is risk management – that has to be the starting point. You have to manage those core risks – they are critical to how the company performs. Then after that you can consider what is the approach with sustainable finance and what your motivation is for doing it. You have to ask yourself what your motivation for doing it is – that is a good question.” He continues to explain how ESG fits with the treasury at Contact Energy. “For us it is such a natural fit with our core company strategy.”

Contact was one of the first companies in New Zealand to align its bank debt to its sustainability goals and Thomson says that when they do roadshows to showcase the company’s sustainability-linked lending programme, investors can see a clear link between the lending and the green projects it supports. In December 2022, Contact refreshed its sustainability-linked lending programme and announced a new NZ$850m facility.

Thomson notes that there has been a real engagement with investors for sustainable finance and there is a large appetite for such products. Thomson rang the bell at the NZ Stock Exchange in March 2023 when it celebrated the launch of its NZ$300m green bonds offer. The reception such products receive now, comments Thomson, is quite different from only a couple of years ago. Previously, investor questions would have focused on the product itself, how it is structured and so on. Now, however, Thomson has noticed a shift in focus towards ESG concerns and a deeper questioning of Contact’s ESG ambitions and decarbonisation strategy. “As an energy company investors do look quite closely at ESG issues and that gives us an opportunity to be up front about what we are doing. Now it seems investors understand the green bonds well and they’re asking about ESG, what our plans are regarding thermal generation and whether we’re being genuine in shifting to renewable electricity,” he says.

An ESG toolkit

With more investors interested in ESG and such issues being embedded into the way of doing business, does this mean that the role of the treasury will be different? Will the skillset of the future need to be different? Thomson believes there will be a broadening of the skills required to work in treasury. “Automation and artificial intelligence (AI) will come into what treasury will look like in the future and some elements of the role will become simpler, quicker or will disappear. Sustainable finance is here to stay and it is growing. You need to have fundamental treasury skills and AI and automation will give you more time to focus on the broader topics, manage stakeholders, and think about how strategy links with investment and how to deal with the reporting on that.”

Thomson comments that with this broader skillset it is important to keep in mind the relationship building that will be necessary to be successful in treasury in the future. “In treasury you have to stay engaged – there are lots of touchpoints with treasury in an organisation. The danger is that you can get set in your ways and stuck on treasury island. With AI and automation you will have more time to get involved in more projects and focus on strategy, critical analysis and managing relationships,” says Thomson. He adds that interpersonal skills and emotional intelligence will become highly important in the future – and will be tools that will have to be added to any treasurer’s toolkit.

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