Green Strategy Transforms Treasury Operations

Responsible companies around the world understand that sustainable business practices can drive both better financial performance today and a better future for our planet. As organisations strive to differentiate themselves through their environmental records, they’re looking across their entire footprint and adopting strategies that range from curtailing business travel, to creating energy-efficient offices, to conserving water, to boosting recycling and eliminating paper from work streams.

JP Morgan and AXA Equitable Life Insurance Company (AXA Equitable) share this commitment. Both organisations are executing well-established and expansive corporate go-green programmes. And as established business partners, we recognised a significant opportunity to apply go-green initiatives in AXA Equitable’s treasury operations. This article looks at how a green treasury strategy was developed and executed, and the positive results it has had within both organisations. By employing new technologies, redundant and paper-based processes were converted into new electronic approaches for everything from receivables and disbursements to risk management and reporting. And by engaging employees and customers, measurable progress has been achieved in reducing the organisations’ direct environmental impact.

Recognising Opportunity

AXA Group has committed to reducing its direct impact on the environment by actively managing waste, CO2 emissions and consumption of natural resources. To reach its sustainability objectives for 2012, operations across the company created their own action plans for contributing to a smaller environmental footprint.

Treasury operations have traditionally been inherently paper-driven, relying on printed statements, payments, pay cheques and reports. Yet over the years, new technologies and online bank offerings have changed the landscape of treasury management. With updated technology, the company’s treasury management team focused much of its strategy on taking full advantage of new technologies and processes that would support an electronic environment.

To develop its strategy, AXA Equitable worked closely with JP Morgan to identify the best opportunities within its treasury department to introduce paperless processes. Since 2007, the bank has been executing a ‘Go Green’ campaign that aims to help its treasury clients worldwide transition to a paperless environment. To date, it has worked with more than 10,000 clients to eliminate more than 141 million documents, the equivalent of 4 million pounds of paper, 47,000 trees and 69 million pounds of greenhouse gasses.

Together, the two companies moved forward with a comprehensive approach that would bring automated clearing house (ACH) solutions and image workflow to receivables; encourage broader use of ACH for both payroll and annuity and pension disbursements; and introduce electronic processes to the financial reporting and cash flow management functions. The initiative has delivered many benefits to AXA Equitable’s treasury operations, including reduced costs, streamlined workflow and mitigated business risks. Importantly, it is also helping the company meet growing customer, supplier and employee demand for sustainable business performance.

Driving Down Costs

When AXA Equitable’s treasury management team focused on the receivables process, it took immediate aim at the payments from clients that arrived via paper cheques without proper documents from online banking programmes. The company transitioned these payments to electronic files at the point of origination, thereby enabling the company to systemically update client account information. In addition, AXA Equitable began to receive associated funds as ACH credits. To overhaul this receivables process, it coordinated closely with its financial institution. In 2009, the company successfully transitioned approximately 230,000 payments from a manual payment process to a systemic based programme.

In response to client surveys, AXA Equitable also set up a web-initiated response system, as well as an Interactive Voice Response (IVR) system, for clients to authorise direct debit of their bank account for making one-time payments. Planning is now underway to introduce new online options that will enable clients to enroll in direct debit on a recurring basis and request electronic disbursement payments. The company has successfully converted 68% of client payments to direct debit.

AXA Equitable also saved additional administrative costs by encouraging both employees and annuity and pension clients to accept disbursements via direct deposit. By upgrading its payroll software, the company will offer employees a self-service function on direct deposit that allows them to update their payment information and deposit into as many as five accounts. Separate direct deposit campaigns boosted participation for employees to 93% and sales force to 60%. For clients, 62% of annuity payments, and 70% of pension payments, are now disbursed via direct deposit.

Improving Efficiency

On a parallel path, AXA Equitable reengineered the lockbox processing system it uses to collect individual and 403(b) annuity payments. It transitioned from a traditional paper based lockbox system to an image driven workflow that truncates payment documentation, significantly reduces storage requirements and improves processing efficiency.

Online financial reports also enabled AXA Equitable to improve document security and enhance business continuity planning. With electronic document management, the company can give designated employees easy access to document images at any time and from anywhere while decreasing the potential for unauthorised access to sensitive information. In addition, key members of the liquidity management team can work out of duplicate offices at home, with no need to carry hard copies back and forth. Periodic tests of AXA Equitable’s emergency business continuity programme demonstrate that these professionals can keep treasury operations running should a disaster scenario occur.

Running a Sustainable Operation

Each day, AXA Equitable was also producing a number of paper reports used to track daily wire transfer detail, daily cash accounting, analysis of bank fees, and bank account reconciliation reports. As it migrated to an electronic treasury environment, the company eliminated thousands of pages of paper reports and the storage cabinets that once held them. It also began to post annual statements on its internet and intranet sites, in PDF format to facilitate distribution while avoiding the expense of mailing these potentially large documents.

The company’s green initiatives also include an Electronic Delivery System (eDelivery). eDelivery targets clients of variable products and encourages them to accept electronic delivery of financial documents they currently receive several times a year. A recent promotional campaign increased enrollment by 187% on an annualised basis, helping to reduce the amount of paper generated by these documents.


Business partners can improve their sustainability performance when they jointly work toward shared goals. Treasury managers should be able to depend on their banking partners to develop and execute green strategies that make operations more efficient and cost-effective. These efforts, which focus on eliminating paper from the work stream, in turn help companies meet a broad range of environmental objectives.

To read more from JP Morgan, please visit the company’s microsite.


Related reading