Celebrating ESG and D&I Leaders

Meet the Treasury4Good Champions

TMI’s Treasury4Good Awards, which have rapidly become a benchmark for sustainable innovation in the industry, celebrate the best ESG and D&I initiatives among corporates, banks, and technology vendors. Read on to discover how cutting-edge companies are embracing sustainability, supporting diversity, and challenging traditional ways of doing business – to the benefit of people, profits, and the planet.

One silver lining of the Covid-19 pandemic has been the increased momentum around ESG and D&I. The growing attention has not only come from investors recognising the ‘resilience’ benefits of investing in sustainable organisations but also from companies themselves placing greater focus on social issues that came into sharp focus during the health crisis.

As a result, 2021 saw the largest number of Treasury4Good Award nominations to date – and some of truly ground-breaking innovations. A perfect example is the ESG-linked FX derivatives initiative undertaken by Drax Group, which was named Best ESG FX Solution. Drax has a significant track record in sustainability and linking the company’s derivatives book to ESG was the next logical step. In a nutshell, the solution applies long-term ESG KPIs to short-term FX trades with two of the company’s main banks, NatWest and Barclays, chosen as partners for the development and execution of the initiative. The ESG-linked FX derivatives agreements cover forwards, swaps and options. This innovative project is a shining example of corporates driving ESG innovation – and has set a new standard for best practice in this area.

The Best Sustainable Finance Project Award was hotly contested in 2021, but the Highly Commended accolade goes to John Lewis. In 2021, John Lewis Partnership signed a new £420m five-year RCF linked to three key environmental targets. These KPIs were based around reduction in global greenhouse gas emissions, reduction in Waitrose operational food waste, and a move to alternative fuels. Furthermore, John Lewis Partnership recently joined leading businesses in signing up to the Science Based Targets’ initiative (SBTi) ‘Business Ambition for 1.5°C’ as well as the UN Race to Zero campaign. The facility was provided by seven banks and Lloyds Bank played the part of Sole ESG and Docs Co-ordinator. The project demonstrated best practice throughout and is a perfect illustration of John Lewis’ commitment to sustainability, and how treasury is proactively supporting that.

The overall winner of the Best Sustainable Finance Project 2021 is Smurfit Kappa. By setting five KPI goals for a recent sustainability-linked RCF – and requiring success in all of them to gain the maximum margin benefit – Smurfit Kappa’s treasury team has demonstrated how a cross-functional project can unify an entire business. This project was arguably one of, if not the most ambitious, the TMI judges have seen in terms of its scope and the commitments made by Smurfit Kappa. With Rabobank and ING acting as advisers, this hugely impressive project illustrates how treasury can embrace and drive ESG, while pushing the boundaries of sustainability norms.

Another popular category this year was Best Sustainable SCF Solution, reflecting how rapidly this area is growing – and how quickly treasury teams are adopting it. As a result, there are three Highly Commended organisations in this Award category. First is Bridgestone. As outlined in a case study in TMI last year, the European treasury team at Bridgestone challenged the status quo of sustainable SCF practices by using external ratings from EcoVadis to ensure their project with J.P. Morgan and Taulia is absolutely cutting edge. This project sets a new standard for best practice in sustainable SCF.

Our next Highly Commended is Phillips. The company’s focus on its responsibility towards society has been the driver behind its determination to embed sustainability in every aspect of its business. Its supplier sustainability programme, which is supported by C2FO, has ambitious goals to see at least 50% of its suppliers committing to science-based targets for CO2 emissions reduction by 2025. This ambition is matched by an equally powerful sense of responsibility to consider the financial health of all of its suppliers – and its SCF programme is helping to do just that.

The third Highly Commended in this category is Malaysia Airports Holding Berhad (MAHB). Due to the pandemic and the ensuing lockdowns, MAHB was keen to set up a supplier finance programme to enable its vendors to enjoy immediate liquidity at competitive pricing. MAHB worked with Standard Chartered to structure a Shariah-compliant SCF solution, which also aligns with the bank’s sustainability framework. The solution also promotes best practices in sustainability across MAHB’s ecosystem.

And the overall winner of Best Sustainable SCF Solution 2021 is Tesco. In September 2021, Tesco became the first UK retailer to deliver a sustainability-linked SCF solution. This initiative involved enhancing its existing SCF programme with Santander to incorporate a sustainability-linked element, with the goal of targeting an ambitious emissions reduction strategy. An industry-first in the UK, this is an innovative, ambitious solution that is driving real change.

The final corporate Treasury4Good Award is for Best Sustainable Trade Finance Solution, and goes to ENGIE. The company was looking for a green solution to support the issuance of trade-related guarantees for its activity in Spain in the area of renewable energy. As such, ENGIE turned to long-term banking partner BNP Paribas to set up a cutting-edge €20m facility for the issuance of green guarantees. This is linked to projects that will provide environmental benefits in line with the UN’s 17 Sustainable Development Goals.

Recognising bank and vendor ESG efforts

The first Award in this segment is Best Bank for Sustainable Supply Chain Finance, and it goes – without hesitation – to Société Générale. This year’s TMI Judges were particularly impressed by the bank’s new ‘sustainability-linked trade finance’ offer. Whereas eligible green trade finance instruments cover only five sectors, sustainability-linked trade finance can adapt to virtually all business sectors, making it more flexible and easily implementable for corporate treasurers.

Next is Best Community Engagement Project, which is taken home by Hedge Trackers. The company’s CEO, Helen Kane, is involved with a project in Zambia with Mothers Without Borders. Helen reached out to 20 female treasury professionals in her network to finance the construction of a ‘women’s empowerment centre’ in Zambia, which grants local women and girls a safe place – protecting them from pre-teen marriage and poverty by offering training, mentorship, and more. This is a shining example of community engagement and a deserving winner.

Meanwhile, the Best Employee Engagement Project 2021 goes to Standard Chartered. The bank leveraged its in-house tech expertise, aXess Labs, to create an app-based solution to help keep its female employees safe on public transport. The solution, XGuardian, helps female members of staff to navigate their surroundings and is primed to send alerts to their family members and local authorities such as the police in case of an emergency. The TMI judging panel congratulates all involved and looks forward to seeing this solution rolled out to more corporates in due course.

Best ESG Liquidity Innovation 2021 goes to J.P. Morgan Asset Management for its Empowering Change initiative. The programme partners institutional clients with qualified minority depository institutions (MDIs) and diverse-led Community Development Financial Institutions (CDFIs) to provide economic opportunity to underserved communities. This industry first demonstrates J.P. Morgan Asset Management’s commitment to advancing racial equality. It also reflects the firm’s ability to deliver liquidity solutions that meet the needs of today’s clients.

The winner of the Best Global Bank for Diversity and Inclusion 2021 is Citi. The bank continues to use its position as a global institution to effect social change. Indeed, Citi is consistently taking a stand on a wide range of issues, including racial and gender equity, immigration, and climate change. As well as running a powerful cross-industry ‘inclusion week’ in 2021, the bank is committed to four key outcomes as part of action for racial equity, including expanding banking and access to credit in communities of colour and investing in black entrepreneurship.

The Best Global Bank for ESG 2021 is scooped by BNP Paribas. The bank is leading the way in sustainable initiatives in Europe, and is also assisting clients with sustainability in the US, LATAM and APAC. The projects contributing to this win are far too numerous to mention here and are crowned by BNP Paribas’ commitment to plant a tree for every contract signed on Welcome, its state-of-the-art client onboarding platform.

And finally, the Best ESG Technology Solution, goes to ICD. In 2021, ICD added 15 new ESG-related products to its portal. ICD also consistently brings technology innovation and ongoing educational opportunities to the community, including a special screening tool that enables clients to see how all the various fund providers designate their socially responsible investing (SRI) and ESG products.