Citi Perspectives Spring 2020

Sustainability is increasingly important to corporates. Many are recognizing the business and efficiency benefits of an enhanced focus on environmental, social and governance (ESG) issues; some are responding to growing expectations among stakeholders — including shareholders, customers and employees — to improve their ESG performance; others simply believe corporates need to start prioritizing the planet and public interests along with profit. As corporates around the world mobilize to address the interconnected challenges of climate change, rapid urbanization and rising wealth inequality — often by targeting one or more United Nations 2030 Sustainability Development Goals (SDGs) — many are looking to treasury to aid them in their objectives. Given its wide range of relationships across the organization and unique visibility into multiple functions, treasury is well placed to fulfil this role. Other than their operational activities, one of the largest environmental impacts for many companies is associated with employee travel. Although video conferencing and modern communications technology have replaced some corporate travel, it remains a significant spend category for many companies. Indeed, as companies expand to new geographies — in order to capture growth opportunities in emerging markets, for example — the need for travel is expected to grow. Corporate travel, especially airline travel, has a significant environmental impact in terms of carbon emissions. A long-haul return flight to New York from London can produce between 0.9 and 2.8 metric tons of CO 2 , for instance. 1 Some observers believe that in order to stabilize climate change, individuals and companies need to reduce their annual carbon footprint to around 1.2 metric tons — less than one such transatlantic flight. 2 Kasia Szymanska Market Management, Commercial Cards, Treasury and Trade Solutions, Citi 1 Source: https://www.wired.co.uk/article/carbon-offsetting-uk-flights 2 Source: https://www.eta.co.uk/environmental-info/air-travels-impact-on-climate-change/