Giving Compass' Take:
- Here are steps that corporate treasurers can take to leverage their position and drive change through impact investment.
- How can corporations collaborate on impact investing work?
- Learn more about impact investing here.
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When you think about who makes the greatest social and environmental impact with corporate dollars, you probably think of the head of ESG or the chief investment officer, not the treasurer. Today’s corporate treasurers, however, are redefining their role beyond risk mitigation, and they’ve become a surprising source of impact within their organizations, moving millions of dollars of cash and investments into low-income communities.
Corporate finance departments haven’t historically been positioned to create impact within their organizations, but an ever-increasing amount of attention on ESG; diversity, equity and inclusion (DEI) and racial justice initiatives has led C-suite executives to look holistically at their business practices for opportunities to innovate. That’s led corporate leaders to recognize that they need new tools to advance change, demonstrate corporate leadership and be good corporate citizens.
According to the philanthropy research organization Candid, following the police killing of George Floyd in May 2020, American corporations emerged as the leading funding source for social and racial justice initiatives. And because many of these ESG and DEI initiatives are directly tied to money movement, whether it’s cash or investment, corporate treasurers are an often hidden but essential driver of social impact within an organization.
So, first and foremost, we need to recognize the great work that many treasurers already are doing in terms of aligning corporate dollars with impact initiatives. Let’s not forget that this probably isn’t part of their job description. Instead, treasurers who are being intentional about impact investing are going above and beyond what they’re paid to do and, more often than not, they’re learning as they go. Until recently, there was no playbook for this.
With that in mind, here are four key learnings that corporate treasurers may want to consider when thinking about how they can leverage their position within an organization to create tangible impact.
- You don’t need to reinvent the wheel.
- Invest in long-term partnerships.
- Don’t fall victim to analysis paralysis.
- Look beyond the obvious targets and leverage your networks.
Read the full article about impact investing by Catherine Berman at GreenBiz.