[Work in progress] Reduction of Climate Risk as a Key to Business Performance - Framework for Sustainable Corporate Treasury Management (CTM)
Keywords:
climate risk, sustainable treasury management, effectiveness of the entityAbstract
The paper examines the implications of climate instability risk on Corporate Treasury Management (CTM) and demonstrates how the adoption of sustainable management strategies can effectively mitigate this risk, thereby enhancing corporate financial performance․ The discussion illustrates that the adoption of sustainable Corporate Treasury Management (CTM) principles not only aligns with the objective of increasing the treasury level but, in fact, fosters its growth by mitigating unforeseen losses stemming from extreme climate conditions. The article explores the utilization of financial instruments, such as climate derivatives, as essential tools for risk management within corporate treasury practices․ The article also examines the relationship between corporate competitiveness and climate instability risk, emphasizing that the effective management of this risk can significantly impact the growth of a company's treasury level and enhance its market position. The paper culminates by emphasizing that the adoption of strategies incorporating environmental considerations and climate-related risks fosters enhanced fiscal stability for corporations and bolsters their long-term viability․ It was proposed to policymakers the necessity for macroeconomic governance and societal transformation that could incentivize corporations to integrate environmental strategies within the framework of Corporate Treasury Management (CTM). It is contended that, within the realm of Treasury Management, the pursuit of sustainable business practices conflicts with the objective of optimizing the treasury, which stands as the paramount economic goal in corporate treasury management․ By utilizing climate instability risk as a case in point, the article illustrates that the implementation of sustainable Treasury Management not only aligns with the primary economic objective but also, through mitigating the effects of climate instability, actively contributes to achieving this objective․ The article offers an analysis of the interplay between sustainable business practices, environmental sustainability policies, and climate instability risk, elucidating how the latter diminishes corporate treasury levels․ If contemporary businesses adhere to the principles of sustainable Treasury Management alongside sustainability policies, future enterprises will be positioned more favorably to optimize corporate treasury levels.Downloads
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