The value of an Environmental, social and corporate governance (ESG) strategy

Your correspondent attended a regularly held symposium at London Business School focused on all things PE. The event was held under the Chatham House rule. Unsurprisingly the world of business rarely changes irrespective of an ownership structure. Market volatility, investor fads, talent management are familiar of course, but what caught my eye was a weighty segment of the day devoted to ESG. The academic perspective featured some LBS research that was illuminating. Corporations not governments can be the agents of change (world’s 10 largest companies by revenue bigger than 180 smallest countries’ combined gdp) All the research suggests that using

Australia’s New Payments Platform – a guide for the international treasurer

Australia has recently followed the lead of the UK’s Fast Payments Service and Singapore’s Fast and Secure Transfers to introduce its own real time payments service – the New Payments Platform (NPP). The NPP will provide significant advances in the ability to transfer Australian dollars, within country, relative to the existing payment platforms available. Key features of NPP payments are: Payments are virtually instantaneous – with a service level agreement that funds will reach the beneficiary’s account in approximately 10-15 seconds There is no limit on the size of transactions which the NPP can process subject to the correspondent bank

Well worth venturing out in the snow for

Under the title ‘Brexit – the final countdown’ and with just over one year left until ‘Brexit date’ on 29 March 2019, the ACT breakfast briefing on 1 March centred around the key question: what will Brexit mean for corporate treasurers? Well worth venturing out in the snow for This was the succinct description of the event by one of the delegates. And despite what were probably the most adverse weather conditions in which the ACT has ever run an event in London, the very respectable delegate turnout proved once again our membership’s high interest in Brexit implications on corporate

IFRS 9: hedge accounting heaven or hell?

IFRS9 was billed as being heaven-sent to corporates who undertake to hedge market risks, presenting not only new opportunities to hedge many more exposures but also to make current hedging mechanics that bit easier. And if IAS39 had never existed, heaven IFRS9 would certainly be. Unfortunately, IAS39 did exist and has done so since 1998. Having become familiar with IAS39, IFRS9 Hedge Accounting adoption may turn out to be hell for some corporates. Systems, auditors, hedge documentation and treasury policies have evolved to ensure compliance with IAS39. Those just about getting comfortable with IAS39, including myself, who do not expect

Gilt yield – time to return to normality, whatever that is

The UK has not usually been known for economic orthodoxy. Yield curves can be inverted for years. Asset values bear no relation to asset replacement costs. Government has foreseen closing down its own funding market. We never saw anything impractical about switching from industry to fund management as an important component of our GDP. These are all situations we have created ourselves. We cannot blame Brussels, although Brexit may yet have an uncomfortable effect on the last. Since 2008 we have nurtured the inversion of Gilt yields and inflation. We target 2% inflation otherwise the Bank of England governor has

Six things to plan for in 2018

As we head rapidly towards the end of the year, we offer some thoughts for issues that may not be front of mind, but which, nevertheless, you may want to consider as we enter the year ahead. 1. Rising Interest Rates The period of very low interest rates may be coming to an end. Now is the time to make sure your teams appreciate the potential impact of operating in a higher interest rate environment, something many of them will not have experienced. As well as checking covenant triggers, the organisation’s fixed/floating mix and interest rate policy should all be

What do treasurers need to know about bank ring-fencing?

To prevent a repeat of the 2008 financial crisis, UK regulators have set out to drastically reform the banking system – by separating the retail and riskier investment arms of UK banks into separate legal entities. Known as ring-fencing, the objective of these new rules is to achieve greater resilience and financial stability for the banking system. Ring-fencing applies to any UK bank with over £25bn of retail deposits, including all major high street banks, and they must be ring-fenced by 1st January 2019. The changes will impact corporates as well as personal customers. Most recently, Barclays announced that it

Pension Deficits – Do these still keep treasurers awake at night?

This month’s PPF 7800 index (1) revealed an aggregate deficit of £180bn for the defined benefit (DB) pension schemes within its sphere, at 31 July 2017. Although this is a significant level, it compares favourably with the deficit position at July 2016 (2), when the level was £333bn. Funding comparisons July 2016 June 2017 July 2017 Aggregate balance -£333.5bn -£186.2bn -£180.1bn Funding ratio 81.4% 89.1% 89.4% Aggregate assets £1,458.4bn £1,514.6bn £1,524.7bn Aggregate liabilities £1,791.8bn £1,700.8bn £1,704.8bn Data set / assumptions Purple 16 – A7 Purple 16 – A8 Purple 16 – A8 PPF7800 Index August 2017 The improvement in the