Climate Risk: The Next Frontier in Treasury Strategy
Based on the Treasury Masterminds Podcast with Marcus Cree, FIS Corporate treasurers have spent the past decade wrestling with geopolitical shocks, broken supply chains, inflation, and volatile FX markets. Just when you thought the to-do list couldn’t get any longer, here comes the next heavyweight risk class marching straight into treasury: climate risk. Most treasurers still place climate somewhere between “new ESG reporting templates” and “update DE&I statement” on the priority chain. Nice to have. Someone else’s problem. A topic for sustainability teams who love PowerPoints a bit too much. But climate is no longer a PR conversation. It’s a financial one. And the numbers are already hitting the P&L.hjj This podcast episode with Marcus Cree, risk management specialist at FIS, pretty much hammered that home. If you missed the Podcast, you can listen to it below: Why Climate Risk Is Suddenly a Treasury Problem Marcus cuts through the noise: climate change isn’t about melting ice caps, it’s about probability shifts. A higher likelihood of loss events affects pricing, insurance, credit spreads, and—yes—cash flow. Treasurers are already feeling it through: Climate risk doesn’t sit next to market, credit, and liquidity risk. It sits inside each of them. Just as the Basel Committee has laid out for banks: Climate isn’t a new silo. It’s a new dimension. From Hurricanes to Cash Flow: Turning Events into Financial Exposure The examples Marcus shared weren’t abstract. Germany’s river flooding knocked out a door manufacturer. A global car company took a share price hit. Wildfires and hurricanes across the US disrupted entire industries. Ports shut down for days create ripple effects that last months. And yes, sometimes one ship sideways in Suez is enough to wreck liquidity cycles everywhere. Climate events disrupt supply chains. Disrupted supply chains disrupt payment cycles. Disrupted payment cycles disrupt liquidity. Treasury is the last stop on that chain. Unfortunately. But VAR Models Only Look a Few Days Ahead… Right? Classic treasury VAR models look at maybe 1–10 days. Climate projections look at 25, 50, and even 100 years. So how do they meet? Simple: Treasury instruments’ price today based on long-dated expectations. Forward curves are built on assumptions about many future quarters. If climate risk changes those assumptions—higher volatility, higher credit risk, higher break probabilities—then the price today shifts too. Banks are already factoring in those forward risks. Higher expected flooding in 2040 → higher credit spread now. If banks are doing it, treasurers need to understand it. What Happens If You Ignore It? Marcus is brutally honest: This isn’t about reputational risk. Nobody is cancelling a company because they dislike your climate disclosures. But the financial consequences? Supply chain fragilities that won’t show up in any traditional model. Climate ignorance becomes financial mismanagement. Treasurers don’t have to become climate scientists. But you can’t price risk you refuse to see. So, Where Should Treasurers Start? Marcus gives a surprisingly reasonable entry point: Treasury doesn’t own climate risk. But treasury owns the financial impact of climate risk. Big difference. Treasury’s Long-Term Blind Spot Most teams live in a 13-week cycle. Cash, liquidity, FX, debt—everything is short-term execution. The problem is: the world that shapes those short-term numbers has already changed. Banks are modelling: Treasury teams can’t stay in their bubble anymore. If you don’t understand the business and supply chain, you can’t understand the risk. Climate impact is no longer fifty years away. It’s sitting quietly inside your financing costs today. A New Role for Treasury This shift is uncomfortable, but also a massive opportunity. Treasurers who embrace climate-adjusted forecasting, scenario planning, and credit analysis will: It’s not ESG. It’s financial survival. Final Thought Climate risk might feel overwhelming and abstract. But Marcus brought it back to something treasurers do understand: Every risk can be priced. The real question: Are you the one doing the pricing—or is someone else doing it for you? Also Read Join our Treasury Community Treasury Mastermind is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information.
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The seven sins of cash positioning: Challenges in modern treasury
This article is written by Nomentia From the outside, it looks like control. Dashboards. Reports. Daily check-ins. But talk to anyone in treasury, and the truth comes out fast: it’s not control. It’s the illusion of it.Behind the numbers is a daily scramble. Outdated data. The tools don’t talk to each other. Manual work dressed up as a process. And the real cash position? Always a little fuzzy, always a little too late. Treasury teams aren’t confused. They’re constrained. They’re being boxed in by tools and thinking that no longer fit the job. And as long as that illusion holds, every decision made carries more risk than anyone wants to admit. The experts Sarah Häger Sarah Häger is Chief Commercial Officer at Enable Banking and a leading voice in Open Banking. With over 15 years in corporate banking (including six years heading Nordea’s Open Banking Community team), she has deep expertise in financial data infrastructure and API development. At Enable Banking, she helps businesses gain better access to their financial data, a critical factor in improving cash visibility and control. Named one of Sweden’s top 75 future female leaders in 2019, Sarah is passionate about using regulation and technology to drive smarter financial decision-making. Jouni Kirjola Jouni Kirjola is the Head of Solutions and Pre-Sales at Nomentia with over 20 years of experience in corporate cash management and has deep expertise in cash forecasting, payment factories, in-house banking, and process development. The seven sins of cash positioning Treasury teams are told to manage risk better, improve forecasting accuracy, and ensure liquidity. But the system is rigged against them. Take Olivia. She’s the Group Treasurer at a multinational with operations in 22 countries and over 150 bank accounts. On paper, she’s responsible for ensuring liquidity and optimizing working capital. In practice, she spends most of her day fighting systems that weren’t built for the job. She knows where the money should be. But knowing where it actually is? That’s a different story. Her frustration isn’t unique. It’s structural. And it shows up in seven distinct — and persistent — ways. 1. Cash moves fast. Financial data does not Payments are instant now. Customers pay in real time. Suppliers expect the same. But the treasurer’s view of the company’s cash lags by hours, sometimes days. Her reports depend on batch processes, delayed bank feeds, and manual updates. By the time the numbers hit her screen, they’re already stale. She’s expected to act in real-time with data that simply isn’t. “Many treasurers today are still making decisions based on yesterday’s data in a world that moves in real time. This isn’t a technology gap anymore. It’s an adoption problem.” –Sarah Häger, Chief Commercial Officer, Enable Banking 2. Too many banks. Too little integration Her company has grown fast — through acquisitions, expansions, and regional deals. The result? A sprawl of banking relationships, each with its own portal, file format, and time zone. The treasury team jumps between systems just to check balances. There’s no consolidated view, no standard feed, and no way to get everyone looking at the same version of cash at the same time. “Every additional bank adds complexity, not just in reconciliation, but in contract management, compliance, access control, and real-time visibility. Without harmonized integration, it’s death by a thousand portals.” –Jouni Kirjola, Head of Solutions and Pre-Sales, Nomentia 3. Tools that weren’t built for real-time cash visibility The enterprise software stack was built for finance. Not treasury. ERPs are good at historicals, not live positioning. Olivia’s ERP can close the books, but it can’t tell her if she can move $5M today. APIs could help, but getting them to work across fragmented systems is expensive, time-consuming, and politically difficult. The treasurer’s toolkit is full of software but light on visibility. “ERPs weren’t built for liquidity decision-making. Treasury needs tools designed for now, not the month-end.”— Sarah Häger 4. Manual labor, modern stakes The mornings start in spreadsheets. Every. Single. Day. The process hasn’t changed in years: log into five bank portals, export yesterday’s balances, copy them into Excel, and manually roll it up into a position report. It’s slow, error-abundant, and draining. And yet, this is still the most reliable method the treasury team has. One wrong cell and the whole forecast is off, but she’s still expected to hit accuracy targets. “When spreadsheets are your source of truth, you’re not managing liquidity. You’re gambling with it.” –Jouni Kirjola 5. There is no single source of truth for cash Sometimes, Olivia’s numbers say one thing, the controller’s dashboard another, and the CFO sees something else entirely. Why? Because cash is scattered across entities, systems, and regions. There’s no single source of truth, just partial pictures, gut feeling, and, worst of all, old reports. And the treasurer has to live with the consequences. 6. Cross-border cash chaos The further the money goes, the less visibility she has. Asia-Pacific reports late. Latin America comes with conversion surprises. Europe follows its own rules. Every geography adds complexity. From time zones to regulatory delays to currency risks. The treasurer is supposed to optimize global liquidity. But the system is so fragmented that she can’t even be sure how much is truly available, let alone where and when. 7. Lack of automation and API adoption APIs are everywhere — except where she needs them. The banks talk a good game about real-time APIs. Providers like Enable Banking, for example, make those APIs accessible across Europe, even for companies with complex infrastructure. But Olivia’s internal setup is weighed down by competing priorities, siloed teams, and long IT queues. The potential is there, but turning it into a working reality still feels like pushing water uphill. “APIs shouldn’t be thought of as a tech upgrade. They’re an operating model shift. Real-time data flow is the foundation for modern treasury.”— Jouni Kirjola Judgment day: Decision without vision Olivia knows the risks aren’t just operational. They’re existential. Because when cash visibility is broken, decision-making happens in the…