WATCH: Standard Chartered on how sustainability is becoming a core pillar for treasurers
Post-pandemic, the need to ensure businesses are building out sustainable growth channels is more important than ever before. For the treasury industry, this means providing their businesses with new ways to invest and manage their funds. But aligning cash management strategies with broader sustainability objectives is no mean feat – especially as many prepare for an impending global recession.
While many corporates have committed to the United Nations’ Sustainable Development Goals (SDGs), the goals are not designed to be applied at the treasury level.
“Normal business activity that occurs at the treasury level must be aligned with an SDG and that’s a formal process,” explains George Lee, Head of Transaction Banking at Standard Chartered Americas.
“It has to be auditable and accredited; you can’t just decide one day that you are doing it, you have work to do to be able to accredit yourself in that space and that’s a challenge.”
Standard Chartered recently launched its ‘Sustainable Account’; a new investment product, that has the characteristics of a Demand Deposit Account. It provides large corporates with the opportunity to contribute to sustainable development through the investment of surplus cash, whilst maintaining daily access to their finances.
“Sustainable demand accounts provide corporates with an opportunity to participate in sustainable development agenda by having their short-term surplus cash, […] referenced against Standard Chartered sustainable loans and projects,” says Lee.
“It is a simple way but fully automated and auditable solution that can be used to prove to the market that they are conducting sustainable activities.”
The options for where to inject this surplus cash are endless and while they can be industry-specific, that does not always need to be the case. Surplus cash can be used in tackling some of the world’s most significant long-term threats, including climate change, quality education, clean energy, and financial exclusion.
Lee highlighted the importance of these products for treasurers moving forward, and the risks to your business of not using them are high.
“You risk potential opportunities if sustainability is not a priority in your business. The more sustainable you are, the more applicable you are to new opportunities so it’s a growth tool,” says Lee.
“As the world turns more socially and sustainably conscious, you want to be on the right side of the fence and more especially if you have a mission statement that speaks to such a pursuit”.
00:00 Introduction
00:57 Why treasures have difficulty aligning with sustainability objectives
02:00 Advantages for businesses who meet their sustainability objectives
03:30 What exactly is a sustainable demand account
04:20 How demand accounts differ from other products in the market
05:20 What corporates risk by not aligning their cash management and sustainable objectives
