Growing ESG Requirements the Top Trend Impacting Treasury, Finds New Report from Economist Impact and Deutsche Bank

  • Banking
  • 21.01.2022 04:00 pm

Global survey of senior corporate treasurers sees 36% of respondents cite growing ESG requirements as the top trend impacting the treasury function in the fourth quarter of 2021, up from 21% in the third quarter
The pressure to comply with ESG initiatives is being felt by corporates like never before, with new research from Economist Impact suggesting that becoming ESG-compliant was the most common concern among treasury departments in Q4 2021.

“Meeting the growing number of ESG requirements has become a huge, but worthwhile and necessary, undertaking for companies – one that involves weighing up a host of different priorities ranging from regulatory compliance and attracting sufficient capital, to minimising costs and meeting consumer demands to securing the future and competitiveness of the company,” says Lavinia Bauerochse, Global Head of ESG Corporate Bank at Deutsche Bank.
The Economist Impact survey reveals that the trend is strongest in North America, with 52% of participants indicating that meeting ESG requirements is a top concern. This percentage is much lower – but still significant – in EMEA (26%) and APAC (30%).

Yet, despite concerns, treasury departments should not shy away from investing in ESG-related activities. “Companies need to think long term but invest short term as part of their transition journey,” notes Bauerochse. Those that don’t may run the risk of losing their competitiveness towards customers and employees. 

The need to start now is compounded by the challenges that remain in front of treasurers looking to support the transition to more ESG-friendly operating models. As many as 60% of North American treasurers surveyed, for instance, cite  “evolving regulation and uncertainty surrounding ESG compliance" as a major barrier to progress – a concern shared by many treasurers globally, albeit to a lesser extent (44%). Further down the line, data collection also represents a significant hurdle, with 28% of European treasurers naming it their biggest concern in managing the transition.

This quarter’s survey also found that 23% of treasurers surveyed saw their top priority over the next three months as managing financial, credit and operational risk, which is closely linked to managing risks associated with climate change and global warming.

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