Key takeaways from the Tech20 Treasurers’ Peer Group 20th Annual Meeting, sponsored by MUFG.
By Joseph Neu
Treasury at multiple headquarters. Technology companies, whether megacaps or midsized, are experimenting with multiple headquarters which will resume as work from home phases out.
- Treasury will be represented across them, even within the US. Cost and competition for talent are drivers, but also diversity; it can be more challenging to get people of color to move to expensive and majority-white communities where US tech firms tend to be located.
ESG less of a credit rating driver in tech. Credit ratings from the three major agencies are likely less influenced by ESG factors in tech, according to analysts, than most sectors. This suggests a disconnect between the ESG initiatives in which many tech companies have invested significantly. And perhaps these efforts are not swaying their traditional credit ratings.
- Since businesses with good ESG scores are touted by ESG proponents as better investment risks, the credit rating considerations are worth contemplating further.
More time to sort out decoupling. A significant capital and liquidity concern in key tech sub-sectors has been the cost and cash flow implications caused by shifting supply chains and distribution to customers in and out of China.
- While a Biden presidency may not shift policy that’s driving US-China decoupling, it is anticipated to slow its pace, allowing for a smoother transition, which would be good news for tech capital budgets and cash flow forecasts exiting Covid.