Developing and Implementing a Sustainable Finance Framework: Top tips for Treasury Teams
Other Debt Finance Resources
Explore: A4S Essential Guide to Debt Finance
Listen: Treasurers Podcast on Green Finance (with Jessica Fries, A4S and Jane Pilcher, Anglian Water)
This document was originally created in 2020, and has been significantly updated in 2023 to reflect the growth in the market, in particular, in sustainability-linked finance and transition finance.
The rapid growth in sustainable finance presents interesting opportunities for treasury teams. Lenders, regulators and investors are increasingly incorporating sustainability into decision making, as they see environmental and social, as well as economic, issues as integral to risk and returns. Lenders and investors are seeking to engage with borrowers on these issues and understand how they are responding. Putting in place a sustainable finance framework is an important first step to access this market.
“Green bonds fit in perfectly with our strategy as sustainability is already integrated into everything we do within the company. Our sustainability agenda covers the social, environmental and economic aspects of our operations throughout the value chain, turning sustainability into a competitive advantage.” Pasi Kyckling, SVP Finance and Controlling (former Group Treasurer), Stora Enso
Sustainable finance frameworks also support organizations by offering potential avenues for new investment, as well as strengthening both their resilience and that of wider society against risks. Through our research we have seen clear benefits to the companies as a result of developing and implementing a sustainable finance framework, including better risk management and mitigation, greater access to capital, enhanced sustainability credentials and improved information for sustainability reporting.
“The sustainability-linked bond process has been beneficial in getting top management to further embrace and embed sustainability in our operations. This acts as a catalyst to achieve our sustainability targets and an opportunity for investors and stakeholders to partner with us to drive change towards a sustainable future.” Kevin Monteiro, Chief Financial Officer, Japfa
How we wrote these top tips
These top tips have been developed to help treasurers implement a sustainable finance framework, based on insights from members of the A4S CFO Leadership Network, the Association of Corporate Treasurers (ACT) and with contributions from group treasurers from large organizations.
The guidance builds on the A4S Essential Guide to Debt Finance and draws on the experience and examples of issuers to set out five top tips for treasurers. The top tips are based on the practical experience of treasurers, international guiding principles, and an extensive list of framework examples. The technical team of ACT and the Sustainable Finance Programme of the United Nations Global Compact also provided input to the document.