Environmental, social, and governance (ESG) is a set of qualitative and quantitative standards that outline the key elements for transitioning to a more sustainable world. With a central role inside large and diverse enterprises, treasury teams' priorities and objectives can have a broad influence that spans internal stakeholders, external business partners, investors and our shared communities. That influence can help treasury teams advance business-wide ESG goals and foster a greener and more inclusive world.
Here are nine steps that treasury teams can follow to design and implement an effective ESG strategy.
Understand core ESG priorities like greenhouse gas reduction/net zero targets and sustainability development goals.
Evaluate ESG priorities across treasury partners and identify internal stakeholders to drive ESG adoption.
Understand how third parties like rating agencies currently view ESG performance and benchmark against industry best practices.
Review treasury policies, identify ESG factors to improve and drill-down into financial targets across daily treasury activities.
Define treasury key performance indicators for specific ESG targets.
Validate and iterate key performance indicators with stakeholders to ensure ownership and transparency.
Establish use cases to drive progress toward key performance indicators, match use cases with design/pricing framework and test across divisions.
Create transparency around current and future state targets with reporting on internal metrics and external scorecards.
Engage partner to regularly test whether proof of concept has driven towards solving hypothesis.
Access to financial incentives to advance ESG goals through fee discounts or improved yields on deposits validated by internal KPIs and/or external scorecards.
Certify green trade transactions and offer incentivized pricing for these facilities. Additionally, certify J.P. Morgan as a carbon neutral provider in our own operations.
Advance social inclusion priorities through access to on-demand wage access for employees as well as pre-shipment financing to minority-owned businesses.
Gain visibility on business units with high ESG scores through virtual accounts and improve awareness of supply chain sustainability benchmarking.
To explore ways J.P. Morgan can advance your ESG priorities, please contact your J.P. Morgan representative.
Governance & Accountability Institute; https://www.globenewswire.com/en/news-release/2020/07/16/2063434/0/en/90-of-S-P-500-Index-Companies-Publish-Sustainability-Reports-in-2019-G-A-Announces-in-its-Latest-Annual-2020-Flash-Report.html
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