Why ESG investments are becoming a core part of corporate treasury strategy

For years, ESG (Environmental, Social, and Governance) investing was seen as a matter for large institutions or public funds. In 2025, that perception has changed. More and more companies — from listed groups to French SMEs — are integrating ESG criteria into their treasury strategies.

Why? Because sustainable investments now offer not just an ethical choice, but a competitive financial advantage.

From compliance to performance

Initially, ESG was viewed through a regulatory or reputational lens — a way to meet disclosure rules or align with corporate values.

But the rise of ESG bond ETFs and sustainable money market instruments has proven something else: responsible investing can be profitable and resilient, especially in uncertain markets.

• Companies that allocate part of their liquidity to ESG assets report higher long-term stability.
• Investors benefit from lower volatility and improved transparency on issuers’ governance.
• ESG credit instruments have often outperformed during downturns, due to their defensive nature.

In short: ESG is no longer just “good PR.” It’s good treasury management.

Why ESG matters for corporate cash

1. Alignment with corporate responsibility goals
   Treasury teams are now expected to reflect the same sustainability principles that guide corporate strategy — including carbon reduction, ethical governance, and social responsibility.
2. Access to high-quality issuers
   ESG-screened bond ETFs, such as the Amundi EUR High Yield Corporate Bond ESG UCITS ETF (LU2346257210), focus on companies with stronger fundamentals and governance practices, which reduces credit risk.
3. Regulatory and investor expectations
   The European Union’s SFDR and CSRD regulations are pushing businesses to disclose how they integrate sustainability into their operations — including cash management.
4. Market advantage
   ESG-aligned assets are increasingly rewarded by investors and partners, making them a competitive differentiator for companies.

How to integrate ESG into your treasury strategy

A. Start with a balanced allocation

Split liquidity between short-term flexibility and medium-term performance:

• Smart Overnight (LU1190417599) for money-market exposure and daily liquidity.
• Amundi High Yield ESG for sustainable yield on excess cash.

B. Define clear sustainability criteria

Set internal guidelines for eligible investments, aligned with ESG scoring or EU taxonomy compliance.

C. Use technology to automate and track

Platforms like Velesios allow businesses to:

• Invest in ESG-labeled ETFs directly from their dashboard.
• Monitor both financial returns and ESG exposure in real time.
• Access institutional-grade custody via Interactive Brokers.

ESG doesn’t mean lower returns

A common misconception is that ESG investing sacrifices yield for ethics. Recent data proves the opposite:

• ESG corporate bonds have outperformed non-ESG peers by 20–40 bps on a risk-adjusted basis in Europe.
• Demand for ESG ETFs has grown steadily, creating deeper and more liquid markets.

In today’s environment, ESG is both a responsible choice and a performance driver.

Conclusion

Corporate treasuries are evolving. No longer limited to safety and liquidity, they now aim for responsible profitability.
By integrating ESG-labeled ETFs into their allocation — like Amundi High Yield ESG for yield and Smart Overnight for liquidity — companies can achieve stability, transparency, and impact.

With Velesios, sustainability becomes a core part of smart treasury strategy — without complexity or compromise.

FAQ: ESG and corporate treasury

Is ESG investing riskier than traditional options?
No — ESG filters often improve portfolio quality by excluding weaker issuers.

Can ESG ETFs be used for short-term cash?
Yes, especially when combined with money-market products like Smart Overnight.

Do regulators require ESG treasury policies?
While not yet mandatory for all, EU disclosure rules (CSRD/SFDR) encourage integration.

Can SMEs access ESG investments?
Absolutely. Through the Velesios platform, ESG ETFs are accessible to both companies and individuals.

Sources & references

• European Commission – Sustainable Finance & ESG regulation
• Amundi – EUR High Yield Corporate Bond ESG UCITS ETF Factsheet
• Morningstar – ESG bond performance report 2025
• Banque de France – ESG and financial stability studies 2025