There's lots of talk of all things green at the moment in the financial world, but it's hard to assess how seriously treasurers are taking it.
We have some clear activity in the bond area (Unilever, Anglian Water - well done, Michel Pinto and Jane Pilcher!), but then it's otherwise a bit 'quiet'.
Having been previously involved with HRH The Prince of Wales' Accounting for Sustainability (A4S) initiative, I'm now again talking to Jessica Fries, who heads it up, about how the ACT can better support them as well as our members. I was invited to speak at the opening of the City of London's Green Summit (we will also be talking green finance in a future webinar with Sir Roger Gifford who is passionate about the subject, as well as in an upcoming issue of The Treasurer), and very recently have been updated by the ICAEW's Head of Sustainability, Dr Richard Spencer, on the Natural Capital Coalition, which they were instrumental in setting up (and which A4S is also supporting).
Many large organisations are part of the coalition, applying a Natural Capital Protocol and using the various sector guides the coalition has produced. Some of these organisations have realised that if nothing changes, in 5 years' time their business model will be unsustainable. The protocol is a framework designed to generate trusted, credible and actionable information for business managers to inform decisions. It allows organisations to measure, value and integrate natural capital (the stock of renewable and non-renewable natural resources that combine to yield a flow of benefits to people - examples being plants, animals, air, water, soil, minerals) into existing business processes. You can find out more at naturalcapitalcoalition.org.
The experts say green finance is so much more than green bonds, and for those not already convinced, the protocol really helps to understand why.
So what does this mean for treasurers?
The ACT's 2017 research, The Business of Treasury, tells us that treasurers are more and more finding a seat at the strategic decision-making table. In the years to come it will be critical for them to ensure they stay abreast of green/sustainable finance developments which will drive much of that strategic decision-making.
Organisations who turn a blind eye will find themselves with an unsustainable business model - whereas those who address the problems we know are out there will have time to reinvent themselves as necessary.
I'd love to hear what today's treasurer thinks about this, and what your plans are in terms of your role in environmental and therefore financial and business sustainability. You can contact me on cstockmann@treasurers.org. And the ACT will be working to give guidance and support to its members and the wider global treasury community on this area which is still unfamiliar to many.
