The Innovation Factor: Going Lean and Green

By Patrick J. Moore, Senior Vice President, Director, Treasury Product Management, Fifth Third Bank

Just a few years ago, one of the hottest business trends in the nation was the move toward sustainable practices. If you weren't going "green," you were behind the curve. Then the economic crisis arrived and the prevailing focus shifted to survival.Yet "green" business practices, surprisingly, did not disappear. According to the October 2009 Business of Sustainability Survey by MIT Sloan Management Review, 92 percent of respondents said their companies continue to be committed to pursuing sustainable business practices.Less than 25 percent of survey respondents indicated they had diminished their commitment to sustainability as a result of the economic downturn.

While less heralded than high profile "green" efforts, such as shifting auto fleets to hybrid technology or changing product packaging to eco-friendly, recycled materials, treasurers and their banking partners have made important strides in sustainability. Corporate treasury has quietly been forging new ground in environmentally friendly practices through the implementation of electronic treasury management tools that reduce the consumption of paper and lower carbon footprints.

As innovators of paperless solutions, banks are playing an increasingly important role in promoting these initiatives which deliver greater efficiencies, improved visibility into cash balances and transactions, and environmental sustainability.

The Greening of Treasury

Banks have long pursued the goal of improved efficiency on the path toward true straight-through-processing. As the industry has developed innovative products and solutions aimed at accomplishing this goal, treasurers have recognized the added benefits of electronification. These solutions enable treasurers to make more timely decisions, redirect resources to revenue producing or strategically important initiatives, and eliminate cumbersome paper processes.

The added eco-friendly benefits associated with the movement toward paperless processes dovetails nicely with today's expanding corporate focus on environmental responsibility. This "green" mentality is reinvigorating the adoption of electronic payment and invoicing initiatives. As a result, banks have an opportunity to further champion paperless processes, in turn helping treasury reduce its environmental impact, while saving on the cost of fees and increasing overall efficiency.

The True Value of Going Green

Banks must continue to support corporate treasury's efforts, helping them build the business case for deploying paperless treasury solutions that streamline processes. In order to avoid having these efforts branded as simply green hype, banks should emphasize the value of the solutions in both business and environmental terms.

By moving from paper checks to ACH transactions, for instance, treasury can lower transaction costs. Switching to an electronic workflow offers the opportunity to reduce the burden on staff, as well as storage fees. Implementing digital archives makes information more readily accessible, driving efficiency, improving security and strengthening business continuity.

At the same time, electronic cash management practices can have a profound environmental impact. According to NACHA's PayItGreen Alliance, the "green" impact of moving from paper to electronic processes for a typical corporate treasury department will result in more than 2,208 pounds of paper saved per year. Similarly, electronification can cut the use of more than 27,000 gallons of gasoline used to transport paper, eliminating approximately 264 tons of greenhouse gases from being emitted into the atmosphere.

Green Is Not Just A Fad

Clearly, the "greening" of treasury is not a fad, but rather a trend. In the past, corporate treasury focused exclusively on attaining benefits ranging from improved cash management, lower transaction costs, greater visibility and control, more efficient practices, and reduced exposure to risk. However, now environmental sustainability has emerged as a key driver in the migration from paper to electronic processes. Banks are poised to play a vital role in supporting this movement.