ESG compliance a ‘top priority’ for treasury departments

More than half (52 per cent) of senior corporate treasurers say that meeting ESG requirements is a top concern for their organisation according to a new survey from Economist Impact and Deutsche Bank.

The global survey of senior corporate treasurers found that 36 per cent of respondents consider increasing ESG requirements as the top trend impacting the treasury function in the fourth quarter of 2021, up from 21 per cent in the previous quarter.

The research found that becoming ESG-compliant was the most common concern among treasury departments, with this trend being strongest in North America where 52 per cent of participants indicated that meeting ESG requirements is a top concern.

This percentage is much lower – but still significant – in EMEA (26 per cent) and APAC (30 per cent), the survey found.

However, despite the rising importance of ESG compliance, respondents were open about the challenges on the road to more ESG-friendly operating models.

As many as 60 per cent of North American treasurers surveyed cited “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 per cent).

Further down the line, data collection also represents a significant hurdle, the survey found, with 28 per cent of European treasurers naming it their biggest concern in managing the transition.

The survey also found that 23 per cent 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.

Commenting on the findings, Lavinia Bauerochse, global head of ESG Corporate Bank at Deutsche Bank said: “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.”

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