Treasury News Network

Learn & Share the latest News & Analysis in Corporate Treasury

  1. Home
  2. News

Under 30% of companies have supply chain sustainability targets - Industry roundup: 14 April

Under 30% of companies have targets to improve supply chain sustainability

Despite 54% of companies being willing to prioritise positive environmental and social impacts over financial returns, less than 30% have made concrete sustainability commitments or set targets. This is a shocking finding from the Sustainability Commitment Paradox, a new research report by Standard Chartered.

Faced with a lack of funding for sustainability initiatives, inconsistent data on ESG-related supplier compliance and the concern of optimising shipping to reduce emissions, progress for many companies remains stubbornly slow.

The research is based on a survey of 300 companies worldwide, with turnovers under US$500m and over US$2bn, to present the views of mid-sized companies and large corporates, respectively.

Overall, large corporates demonstrated higher progress on sustainability action, proving they are critical to accelerating the agenda. But more leadership is required, as less than a third of companies have made commitments regarding their operational impact, revealing a lack of tangible action.

Nearly two-thirds (65%) of large corporates are or would be willing to trade off financial returns for positive sustainability outcomes, compared with 47% of mid-sized companies.

Among those who have yet to take action to improve sustainability, only 24% of large corporates plan to reduce waste, energy consumption, and water usage, compared to just 19% of mid-sized companies. Additionally, 36% of large corporates plan to use more recycled and reusable materials, compared to 28% of mid-sized companies.

And as climate risk becomes increasingly urgent, 38% of large corporates already have contingency plans if their supply chains are impacted by environmental issues, while another 38% plan to do so. In comparison, only 25% of mid-sized companies have made contingency plans, and 50% plan to develop them.

Approximately 45% of all companies surveyed plan to purchase carbon credits to offset emissions, highlighting the rising importance of quality carbon credits and accessible markets.

“Our clients universally want to play a role in delivering a more sustainable future while still continuing to pursue their strategic ambitions, which in the intermediate-to longer-term should not be mutually exclusive, nor should sustainable practices only be in realistic reach for the largest companies,” said Marisa Drew, Chief Sustainability Officer, Standard Chartered.

Access to finance and data and a lack of ESG-compliant shipping emerged as critical challenges preventing companies from setting commitments and targets. For approximately 70% of large corporates and mid-sized companies, obtaining funding or finance for ESG and sustainability-related expenses and investments is a significant issue. This is followed closely by the challenge of accessing data and reporting on the ESG practices of suppliers for almost 60% of all the companies surveyed. Approximately half also highlighted their concern in optimising shipments, logistics and distribution routes for ESG compliance.

Encouragingly, all companies surveyed take a broad supply chain view of sustainability by looking outside their operations and products. 44% of mid-sized companies and 39% of large corporates plan to incentivise their suppliers to produce more sustainable products and operate more sustainably. In addition, supporting suppliers with access to finance and know-how for environment programmes is a priority for almost 45% of mid-sized and large corporations.

“We recognise the challenges that companies face when implementing sustainability across their supply chains,” noted Michael Spiegel, Global Head, Transaction Banking, Standard Chartered. “We believe financing incentives and deep-tier financing solutions, coupled with sustainable supply chain finance platforms, can play a key part in addressing some of the crucial roadblocks.”

 

Coupa and Goldman Sachs promise seamless business payments

Coupa and Goldman Sachs Transaction Banking (TxB) have announced a joint initiative to simplify payment processes between businesses and their global supply chains. Making payments between companies is fraught with operational challenges that are costly, onerous, and inefficient. Through this collaboration, Goldman Sachs TxB and Coupa say they will enable customers to easily make domestic, cross-border, and foreign exchange (FX) payments to 124 currencies across 167 countries.

The pair outlined the three main selling points of the initiative in a press release: 

  • It features API-led integration, enabling real-time capabilities and rich transparency of data exchange.
  • The ability to make payments within Coupa should support streamlined processes.
  • The solution will offer Swift GPI to track payments from end-to-end and should increase efficiencies throughout the payment process.

“This collaboration allows us to unlock additional value for global businesses looking to modernise their payments processes and increase visibility for both buyers and suppliers,” said Brinda Bhattacharjee, Head of Product, Transaction Banking at Goldman Sachs.

The news comes after reports from Reuters, Bloomberg and other outlets this week that Goldman Sachs Group will launch its transaction banking business for corporates in Japan. The service will run on its cloud platform that initially debuted in the US and has rolled out to the UK, Germany and the Netherlands. Japan marks the first outpost for Goldman Sachs Transaction Banking in Asia.

 

Credit terms and conditions tightened for European securities financing and OTC derivatives 

The European Central Bank’s (ECB’s) March 2023 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter (OTC) derivatives markets (SESFOD) marks the tenth anniversary of this survey. The three-monthly SESFOD is an essential input into the ECB’s financial stability and market functioning analyses, such as the Financial Stability Review.

Overall credit terms and conditions tightened slightly over the December 2022 to February 2023 review period for all counterparty types. Price and non-price terms tightened for all counterparty types except sovereigns, and in particular for banks and dealers. The overall tightening of credit terms and conditions was mainly attributed to a deterioration in general market liquidity and functioning. It continued the trend reported for the previous seven quarters and was in line with the expectations expressed in the December 2022 survey. 

Survey respondents expect overall credit terms to tighten further from March to May 2023. The practices of central counterparties, including margin requirements and haircuts, contributed slightly to the tightening of survey respondents’ price and non-price terms. The amount of resources dedicated to managing concentrated credit exposures increased in the December 2022 to February 2023 review period, continuing developments reported since the March 2022 survey round. The use of financial leverage decreased for investment funds and insurance companies over the review period, and hedge funds intensified efforts to negotiate more favourable terms.

Regarding securities financing transactions, a significant share of respondents reported that the maximum amount and maximum maturity of funding offered against euro-denominated securities had increased for most collateral types, particularly for government bonds. Survey respondents also reported larger haircuts being applied to high-yield corporate bonds, asset-backed securities and covered bonds. At the same time, financing rates/spreads had increased for financing secured against all collateral types, in some cases significantly. In addition, they reported higher overall demand for funding, particularly funding with a maturity greater than 30 days. Liquidity had continued to deteriorate for all collateral types, in particular for high-yield corporate bonds, government bonds and financial corporate bonds.

Turning to non-centrally cleared OTC derivatives, survey respondents reported that initial margin requirements for most of these types of derivatives had increased in the December 2022 to February 2023 review period. They reported an increase in the maximum amount of exposure for certain types of credit derivative, although a decrease was reported for commodity derivatives. Respondents reported an unchanged maximum maturity of trades for all types of derivative. Liquidity and trading improved somewhat for foreign exchange and interest rate derivatives but deteriorated for most other types of non-centrally cleared derivative.

The ECB included particular questions in the March 2023 survey to examine the longer-term trend. The survey asked respondents to compare credit terms and conditions at the cut-off date of the March 2023 survey round (i.e. end of February 2023) with those reported in the March 2022 round. Compared with the previous year, overall terms and conditions for securities financing and OTC derivatives transactions had tightened for all counterparty types.

The SESFOD survey is conducted four times a year and covers changes in credit terms and conditions over three-month reference periods ending in February, May, August and November. The March 2023 survey collected qualitative information on changes between December 2022 and February 2023. The results are based on responses from a panel of 26 large banks, comprising 14 euro area banks and 12 banks with head offices outside the euro area.

 

KeyBank taps Qolo for virtual accounts and API-based payment solutions

Qolo, an omnichannel card and payment platform, has announced it has been selected to power KeyBank’s integrated application programming interface (API)-based payment solutions and virtual accounts. 

The move is designed to enable KeyBank’s customers to instantly create advanced virtual accounts and seamlessly connect to underlying payment modalities, including real-time payments (RTP), ACH and wire transfers.

“The integration of Qolo into KeyBank’s APIs is another proof point in our embedded banking strategy, allowing clients to streamline and scale their strategies by utilising our digital payment tools to power innovation in their platforms,” said Jon Briggs, Head of Commercial Product & Innovation at KeyBank.

 

FCA to lead GFIN Greenwashing TechSprint

The FCA will be among 13 international regulators so far taking part in the Global Financial Innovation Network (GFIN)’s first ever Greenwashing TechSprint and has invited all UK-based firms interested in participating to apply from 17 April 2023.

The GFIN is a group of over 80 international organisations committed to supporting financial innovation in the interest of consumers. The FCA currently chairs the GFIN’s Co-ordination Group, which sets the overall direction, strategy and annual work programme.

The number of investment products marketed as ‘green’ or making broader sustainability claims is growing. Exaggerated, misleading or unsubstantiated claims about environmental, social and governance (ESG) credentials damage confidence in these products. The FCA says it wants to ensure that consumers and firms can trust that products have the sustainability characteristics they claim to have. 

Therefore the FCA and the GFIN will be launching a virtual TechSprint, hosted on the FCA’s Digital Sandbox, to bring together international regulators, firms and innovators to address sustainable finance as a collective priority.

The objective of the TechSprint is to develop a tool or solution that can help regulators and the market effectively tackle the risks of greenwashing in financial services. UK-based firms can apply to take part from 17 April 2023. The application window will remain open for four weeks.

To support the application process, the GFIN provided an information pack for firms interested in the TechSprint. Firms that are successful in their application will proceed to onboarding, which will take place 1-2 June. This will provide firms with training on the Digital Sandbox and an in-depth overview of the TechSprint process. The TechSprint will launch on 5 June and run for three months, ending with a showcase day in September 2023.

 

Strong growth in corporate banking leads Capital Bank to Finastra

Finastra has announced that Capital Bank has gone live with its Corporate Channels and will soon follow with Trade Innovation and other Corporate Channels modules. The combined offering will help to streamline banking services for corporates in Jordan, Iraq and Saudi Arabia. Once fully implemented, the solutions will enable the bank to digitalise manual tasks, process lending operations quicker and at a lower cost, and offer its customers a single platform for all corporate features. IBC Consult, a provider of banking services in the MENA region, is handling the implementation of the solutions.

“The success of our corporate banking business is critical for our bottom line, and we needed solutions that support our growth and enhance how we serve our customers,” said Yasser Kleib, Group Chief Institutional Banking Officer at Capital Bank.

“We chose Finastra due to its premium interfaces, seamless integrations with Swift and our internal systems, as well as its fast bulk payment functionality,” added Izzidin Abusalameh, Group COO at Capital Bank.

Corporate Channels is a digital banking platform that delivers a single, intuitive portal to unify trade, cash, supply chain finance, lending, and treasury services for corporates. Trade Innovation is an end-to-end solution for frictionless trade and supply chain finance. The trade services platform uses straight-through processing, digitalisation, and data analytics to enable intelligent trade for growth and the ability to evolve with compliance, customer and competitive demands. 

 

Bottomline joins Datadog cloud security marketplace

Bottomline has announced a new integration with Datadog, a monitoring and security platform for cloud applications. Datadog consolidates metrics, traces, logs and more to help organisations scale their cloud environments, troubleshoot potential issues and provide their customers with excellent digital experiences. 

The Datadog Marketplace connects its customers with technology integrations allowing more customisation and flexibility. Bottomline’s monitoring solution, Record & Replay, is designed to help financial institutions and companies defend against threats from internal and external users of their systems. The solution’s non-invasive, invisible security captures user behaviour across enterprise mainframes and systems in real-time, protecting against threats and intentional or unintentional data leakage. 

The capabilities of Record & Replay are now available to Datadog customers enabling them to monitor 3270/5250 mainframe users via network traffic.

 

Surecomp’s new Chief Revenue Officer tasked with driving digital trade finance growth

Surecomp has announced the appointment of Tal Weiser as Chief Revenue Officer to accelerate digital trade finance adoption and support the company’s growth objectives. Helping fulfil its mission to enable seamless, sustainable trade for everyone by removing barriers and fostering collaboration, Weiser will focus on reinforcing Surecomp’s market expansion within the financial institution and corporate domains.

With over twenty years of experience in the fintech and telecommunication industries, Weiser successfully built and led high-performance teams and implemented go-to-market strategies for better integration and customer-centric alignment across all revenue-related functions.

Weiser joins Surecomp from Finastra’s payments division, where he served in several senior roles including SVP Global Accounts, Global Services Managing Director and most recently APAC Managing Director.

“Tal is a highly regarded executive in the transaction banking arena, and we’re delighted he has joined us at such an exciting time,” said Guy Perry, President and Chief Executive Officer, Surecomp. “As we continue to drive a pivotal shift in the collaborative approach to digital trade finance, together we are committed to supporting our customers across the globe as they optimise customer service and business expansion through trade finance digitisation.”

Like this item? Get our Weekly Update newsletter. Subscribe today

Also see

Add a comment

New comment submissions are moderated.