Strategic Treasury

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Moving Sustainability to the Heart of Corporate Culture While some companies have treated sustainability as a regulatory and corporate reporting requirement in the past, it is now becoming a crucial component of the political, economic and social agenda and therefore central to business strategy and delivery.

Moving Sustainability to the Heart of Corporate Culture

Moving Sustainability to the Heart of Corporate Culture

by Dick Oskam, Global Head of Sales for Transaction Services and Armand Ferreira, Director Sustainable Finance, ING

Sustainability has been on the corporate agenda for many years, but we are now reaching an inflection point, driven by environmentally and socially conscious corporations, consumers and banks, such as ING. While some companies have treated sustainability as a regulatory and corporate reporting requirement in the past, it is now becoming a crucial component of the political, economic and social agenda and therefore central to business strategy and delivery. ING has been an industry leader in placing sustainability at the heart of our business, which in turn shapes our strategy, approach to financing, solutions and service delivery.

As sustainability becomes central to corporate culture, it will increasingly become a criterion for corporate treasurers when selecting their partner bank. As a result, ING’s value proposition as a partner bank, not only for transaction and financing services, but as a strategic partner that demonstrates shared corporate objectives becomes increasingly compelling.

A partner for achieving sustainability

Financial services have an important role to play creating a healthy and sustainable world, not just by trying to be more sustainable ourselves by reducing our direct footprint, but also in the choices we make in lending, investing and the services we offer to customers. For example, we were an early signatory to industry-wide initiatives such as the Equator Principles, but we are committed to encouraging and promoting the sustainability agenda across our business. From a financing perspective, for example, this includes prioritising businesses and projects that deliver environmental and social improvements.

Progress towards sustainable lifestyles and business practices cannot move fast enough, but given the scale and complexity of the challenge, sustainability across all aspects of the way that we live and work is a longer-term objective rather than a short-term goal. For example, it is difficult for many people to imagine how they would manage without a car; however, as they become accustomed to hybrid and ultimately fully electric vehicles, their choices and expectations change.

The same applies to the business community, including banks. If all financing for less sustainable technologies and power generation were to be switched off overnight, the economic and social impact would be devastating. However, by encouraging more sustainable alternatives, such as renewable and clean energies, recycling waste products into fuel and usable materials, and enhancing public transport infrastructure through access to financing, we are witnessing a similar change taking place. At ING, we are pioneering sustainable finance, investing €20.9bn sustainable transactions financed by mid 2015, and this remains a key element of our strategy.

The heart of our business culture

Our pioneering business approach is less obvious when looking at specific transactional services such as cash management, which by their nature focus on sustainability through automation and dematerialisation. Increasingly, however, a bank’s sustainability credentials are becoming more important to potential customers when appointing a partner bank. This is already most apparent amongst government and public bodies who are expected to demonstrate and promote sustainability principles, driven in part by consumer pressure and therefore their democratic mandate.

For example, the Dutch government recently named ING as its bank of choice, with sustainability a key selection criterion. From 2016, ING will provide comprehensive payment services to all Dutch government departments and government agencies such as the Central Law Enforcement Collection Bureau and DUO, the executive agency for education, which accounts for about 40 million transactions. This builds on the existing relationship between ING and the Dutch government, as ING has been processing all payments for the Dutch tax authorities since 2011, which will continue alongside this new arrangement. The Dutch government selected ING based on its ability to meet stringent cost, quality and sustainability criteria. These criteria included the quality of payment services, security, innovation, service offering and implementation and technical requirements.

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