“ESG Reporting: What is Treasury’s New Role?”
Abstract: Traditionally, corporate treasurers have been responsible for managing cash and market risk, ensuring that the company has access to sufficient sources of funding, and managing complex compliance issues. In recent years, this role and the treasury management function has expanded tremendously.
Current treasurers must now balance more traditional tasks of managing cash, handling foreign exchange and short-term debt, and investment management with the increased demand of managing capital market activities, increased responsibilities associated with M&A activity, management activities related to insurance and pension programs, credit and receivables management, and working capital projections.
As a result of these more non-traditional tasks, treasurers need to understand ESG (environmental, social and corporate governance issues) reporting risk factors, which are embedded in any firm’s corporate strategy. These factors not only affect financial performance but can provide guidance on short-term investment volatility, particularly in falling markets (Hudson and Knott, 2006).
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