Great treasurers never stand still. They’re always looking for new ways of working. Better efficiency solutions. Smarter funding sources. And, now more than ever, they are examining the ways in which sustainability is reshaping the future. Not only are they asking how new sustainable business models will impact treasury but also how treasury can support positive change.
Treasurers are not alone in this endeavour. Take Jan Kempers, Program Manager Sustainable Development at HEINEKEN Netherlands Supply, for example. As he explains in an exclusive interview with ING as part of the bank’s ‘campaign that features so-called changemakers; people and companies who ignite, drive and lead sustainable change. HEINEKEN is in the process of transitioning from a fossil fuels-based supply chain to an entirely renewable one. This includes using electric barges running on modular batteries to transport goods within the Netherlands under an ambitious project called Zero Emission Services. This initiative is run by a consortium comprising energy company ENGIE, Finnish energy and maritime equipment company Wärtsilä, the Port of Rotterdam Authority and ING, with the aim of decarbonising the shipping sector.
While that sounds like an incredibly challenging goal, being a changemaker means thinking beyond things that are possible in the here and now – working in responsible ways towards creating a better future. Take the concept of products-as-a-service, for instance. It seems radical in this day and age of instant consumerism that people might want to give up ownership of their possessions. But what if, instead of always buying products, people and businesses simply leased them when they needed them? Apart from producing less waste this could also mean reduced costs for consumers and corporates using those services.
On the treasury side, there will naturally also be an impact. As transitioning to a product-as-a-service business model does not happen overnight, new revenue models and customer propositions will be required. Treasury will also need to consider the impact on cash flows, with products being rented by customers, rather than bought, collections will be lower value but higher volume. Naturally, banks will also need to rethink the financing they offer to treasurers, as Jules Kollmann, Managing Director, ING Structured Finance, outlines in an insightful article on products-as-a-service. Of course, lease accounting will also come into play in a world where ownership of products is no longer the be-all and end-all.
Another sustainability trend that has the potential to impact treasury is the circular economy. This aims to break the current ‘take, make, waste’ philosophy around goods and materials by encouraging the re-use of existing resources. This applies even to man-made materials like plastic, as Chris Daly, VP Sustainability, PepsiCo Europe, explains in a sector-focused ING Changemakers interview.
Under the circular economy concept, 100% recycled plastic can be used to make new bottles, so that plastic never becomes waste. Of course, this model relies on consumers participating in returning used bottles into the system, and some companies are looking at ways to incentivise this, including the possibility of paying a small amount to customers for returning bottles. This then feeds into the concept of circular financial flows, instead of the simpler linear flows of the past. And to make sustainability truly work, treasurers must start considering the impact of these new ways of working sooner rather than later.
As HEINEKEN’s Kempers puts it: “Our time is ticking away, so we need all the great brains of the world to come together to try to solve the challenges we are facing. So, please, ask yourself: ‘What will be my role and what will be my contribution?’”
To find out more about how sustainable initiatives are changing the world we live in, and re-shaping the traditional role of the treasurer, please visit https://new.ingwb.com/doyourthing.