Havard-Williams, formerly a partner and head of the environment and climate change practice at law firm Linklaters, delivered the findings of the TFMR in October, and will be speaking at the ACT’s ESG conference on 28 November. The wide-ranging review enlisted the support of corporate treasurers alongside other market participants, financial institutions, government departments and other public bodies and regulators.
The review, which was sponsored by HM Treasury and the department for Energy Security and Net Zero (DESNZ), sets out a roadmap to scaling transition finance, recognising that the UK is already a leading sustainable finance capital. But the review also acknowledges the challenges ahead, the need for capacity building, clear communication and high levels of governance.
A key issue will be the need to develop the right skills in order drive the sustainable finance agenda forward – a point indentified in a PwC report highlighted by the review, which says that financial services firms are not doing enough to upskill the existing workforce, and that new entrants will not be enough to plug the skills and expertise gap.
“It's not like we haven't had to addressed new areas before,” Havard-Williams says. “If you think about how corporates have had to engage with cyber, there are ways the world has changed and you have to incorporate new information as a relevant factor in decision-making.”
However, Havard-Williams is keen to stress the opportunities presented by the green transition, and the role that treasurers can play within this. “We are talking to corporates and talking to corporate treasurers, because the transition is driven by the real economy. This could have been an internal discussion within financial services and professional services,” she says. “And that would be an incomplete conversation and more likely to miss things.”
Havard-Williams adds that corporate treasurers are the entry point for corporates to engage with the report. “What we can already see is that CapEx and R&D spend, and therefore transition-related spend, is becoming a key indicator in the context of financing, especially for high-emitting industries. So, whether finance is labelled or conventional, it’s going to become a much more salient issue.
“And I think it's important that corporate treasurers know that this is the direction of travel. The way in which regulation has developed has been quite disclosure-focused. And sometimes that means that you can get a bit over-focused on the process of disclosure, but actually there's a strategic imperative behind that.
“So, understanding what the indicators are and how the market is shifting to accommodate transition strategy is a relevant factor.”
This is a call to action, a call to lean in. It's really important that corporates and corporate treasurers are in on that conversation
Joanna Bonnett, immediate past president of the ACT and group treasurer of Straumann, was part of the TFMR expert panel. In this capacity she represented the diverse views of the treasury community on transition and labelled finance. Bonnett thanked everyone from within the treasury community who participated in the many one-to-one interviews and workshops held across spring and early summer. “Your contribution, as ACT members, was vital to ensure your views were accurately represented,” she said.
In terms of next steps, the government welcomed the review’s report at a launch event at the Mansion House, which followed the TFMR team opening the stock exchange trading (see picture). Industry minister Sarah Jones MP, said: “Mobilising public and private finance will be critical to achieving our clean energy mission and international climate goals.
“The government is working quickly to remove the barriers and deploy legislative actions to accelerate the work.”
The review proposes a number of bodies to help drive the transition forwards, including a Transition Finance Council, convened by the City of London Corporation, and a new Transition Finance Lab, housed within the Green Finance Institute. “This is a call to action, a call to lean in,” Havard-Williams says. “It's really important that corporates and corporate treasurers are involved in that conversation.”
Philip Smith is editor of The Treasurer
More information about the ACT ESG conference
