In Treasury We Care Too
By François Masquelier, Chairman of ATEL, Luxembourg Association of Corporate Treasurers
The environment is still top of the global agenda as climate change continues to be a major cause for concern and the reason why numerous natural disasters and extreme weather events happen. At the same time, the push for Corporate Social Responsibility is gathering pace as members of Gen Z and millennials demand the implementation of their core value of sustainability. It is a perfect moment for us, as corporate treasurers, to ask ourselves how we can contribute towards sustainability. And the answer lies firmly in our management choices.
CSR and sustainability
There’s no disputing the fact that sustainability and Corporate Social Responsibility (CSR) are now central concerns for businesses and, as a result, they also affect the treasurer’s role. What many banks also call Environmental, Social, and Governance (ESG) factors are fast becoming obligatory and an integral part of internal processes.
Digitisation is enabling further enhancement of the efficiency of these processes, whether operational, environmental or social. But companies need to truly embrace the idea that it’s the responsibility of all firms to chip in. And it’s not only by deploying ‘clean’ funding or ‘green bonds’ that they can contribute - even if such funding is clearly desirable. In fact, there are plenty of other, smaller actions that can help support businesses’ claim to be responsible.
The objectives are manifold: to reduce costs, risks and travel, to go paperless, to automate processes, to improve wellbeing at work, to respect diversity and to add value. And the need is all the more pressing due to the fact that, rather than being a mere fashion or trend, sustainability now constitutes a duty imposed by a European Directive , which obliges firms to produce reports on the subject.
Then there’s the perspective of the millennials and Gen Z, with their expectations more attuned to social values. Clearly, any failure to adopt this approach would be demotivating or off-putting for people in these younger groups, who are on a quest for a more ‘responsible’ society. And since this momentum towards corporate social responsibility is likely to be beneficial in all respects and for all stakeholders, buying into it is becoming a no-brainer. CSR needs to become part of our genetic makeup, a central plank of thought process and actions.
Treasurers are in a position to contribute positively to the drive towards sustainability, but currently only 78% of the world’s top 250 companies talk about CSR, according to The Road Ahead, The KPMG Survey of Corporate Responsibility Reporting 2017. This explains why the European Union has decided to impose reporting on this topic rather than merely recommending it. However, at least some CEOs clearly believe it is important for corporations to carry out their business in a socially responsible manner – and CSR must become part of a company’s DNA in order to do so.
CSR a factor in attracting fresh talent
With millennials and Gen Z professionals being highly sensitive to CSR, it stands to reason that they will prioritise this when choosing an employer.
A treasurer who can demonstrate his/her socially responsible credentials can enhance the appeal of his/her department. Even small tweaks to behaviour at work will contribute towards making the world a better place. Good environmental practices can also boost a sense of well-being and belonging among staff. Furthermore, investors are increasingly looking for companies that can prove they follow good CSR practices.
As Larry Fink, CEO of BlackRock, summed it up: “Every company must not only deliver financial performance, but also show how it makes a positive contribution to society.”
Let’s consign analogue faxes, snail mail and reams of paperwork to the past. Instead, we can introduce ratios or key performance indicators (KPIs) that show, for example, our reduced paper consumption.
Let’s ditch our wastepaper baskets and encourage uncluttered desks and the use of tablets and PC screens rather than paper print-outs. We can work on wipeable brainstorming boards and give presentations on giant screens rather than using paper flipcharts.
We also recommend ideas such as virtual and centralised or digitised know your customer (KYC) procedures. And finally, let’s also consign paying by cheque to the past and instead encourage electronic payment, which is faster and safer as well as being an environmentally friendly practice.
Wellbeing and a better work-life balance
Members of Gen Z and millennials are clearly keen to strike a better balance between their work and private lives. To this end, process automation will help reduce the time spent on repetitive and time-consuming tasks, leaving them free to focus their efforts on value-adding activities.
Companies adopting a CSR policy will also see improvements in staff attitude, behaviour and well-being. Driving people towards burnout never pays in the long term. Efficiency can be improved simply by improving the working environment and numerous studies indicate that wellbeing and productivity are not incompatible. In fact, they are often linked.
Zero CO2 emissions: the ‘little things’ we tend to forget
Let’s works towards significantly reducing our levels of CO2. For instance, we can opt for a telephone or video conferencing to avoid unnecessary or repeated travel. And in the same vein, we can favour e-learning over courses held all over the world. We should also encourage our teams to travel to meetings, courses and events by public transport. If cars are still the preferred choice, we should encourage car-sharing. Home-working can also be encouraged, to a certain extent, aided by technology to limit wasted time and energy.
Treasurers should encourage staff to use less paper, to recycle, opt to work with more responsible banks and encourage solutions based on blockchain technology or its derivatives, including Distributed Ledger Technology (DLT), such as HyperLedger, and smart contracts.
The use of platforms – the internet and virtual solutions – all adds up to making a number of small but collectively beneficial actions every single day. We can be part of the solution at our own humble level, however minimal these actions may be.
I am not suggesting treasurers alone can implement enough environmental practices to earn their company ‘Global Compact’ status – a United Nations’ certification that involves CSR and reporting. Nor am I saying all businesses should use green indexes such as Sedex, or implement the One Report method – although that will be compulsory eventually.
But what I am saying is that treasurers should at least recommend such activities.