MB Financial BankWindy City Summit

June 8, 2012

Sustainable Treasury Management:Going Green Can Save You Green

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Agenda

• Situation Analysis• Top Trends• Working With Your Bank• Resources

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Before We Begin

Two reminders before we begin today

This is not a presentation about changing light bulbs or recycling waterbottles. Although change begins with simple tasks and lowhanging fruit, we will focus on the Treasury Management industry and trends in the business community at large.

Sustainable Treasury Management does not just apply to Fortune 500 companies. You will learn that in many cases, small businesses are more involved with and better leveraged to implement go green and eco-friendly campaigns.

Sustainable Treasury Management impacts all areas of the business community

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Situation Analysis – Environmental Fast Facts

Each year, Americans throw away enough paper and plastic cups, spoons, forks, and knives to circle the Earth 300 times

Recycling one ton of paper saves the energy equivalent of 185 gallons of gasoline

Recycling 1 million laptops saves enough energy to power 3,657 homes for an entire year

It takes 90% less energy to recycle aluminum cans than to produce new ones

Making 2,000 pounds of paper from recycled paper saves up to 17 trees and uses 50% less water than creating paper from original pulp

Over 1.7 million tons of plastic water bottles are produced annually in the U.S. requiring the energy equivalent of over 500 million barrels of oil – approximately 75% of those bottles are not recycled

Aluminum cans can take up to 500 years to decompose, but only 6 weeks to recycle

Clean Air Council, 2012

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Situation Analysis – What is Sustainable Treasury?

Sustainable Treasury Management is the concept of deploying an overall program or strategy that supports environmentally friendly or green initiatives throughout business operations including:

Paper reduction Electronification and automation Alternate and renewable energy sources Recycling and waste management Process improvement Product and technology innovation Construction, transportation, and logistic redesign Employee engagement and education

There are several different components to a sustainable Treasury Management program

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Situation Analysis – Why Sustainable Treasury?

There are several factors influencing businesses that haveignited the sustainable Treasury Management movement:

Cost reduction initiatives Regulatory guidelines and enforcement Eco-labels and certifications Energy, waste, and resource efficiencies The electronic world at large Political and social pressure Competitive advantages

Businesses are moving beyond desire and compliance to competitive advantage

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Situation Analysis – Sustainable Treasury Landscape

Sustainable Treasury Management is growing across all businesses andall industry segments. However, the market is seeing a pull from thetop and the bottom between large and small companies which is squeezing the mid sized companies who are more followers.

Large businesses (over 10,000 employees) More resources, support many segments, top down

management support Small businesses (less than 500 employees)

Nimble, product or industry focused, grass roots movement Strategic focus on eco-friendly initiatives in targeted industries

Highly regulated, manufacture specific products, manage waste Automotive, Energy, Transportation, Farming, Hospitality,

Retail

Green agendas are growing across all businesses and all industry segments

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Situation Analysis – Corporate Go Green Strategies

Corporate Treasury Go Green strategies can be looked at in three different categories

Passive Reactive, one off projects, no real strategy or business plan

Active Formal sustainability program, employee engagement,

commitment to community footprint

Aggressive Internal personnel dedicated to Go Green, formal policies with

customers and local businesses, proven industry leadership

Go Green strategies differ by organization and industry segments

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Situation Analysis – Challenges to Sustainable Treasury

Adoption There continues to be a high resistance to change Overall education on business impacts and savings is limited

Cost There can be significant up front costs to sustainable Treasury New technologies carry higher price tags to implement and maintain

Infrastructure The U.S. is not yet setup for the next generation alternative energy

solutions Many eco-friendly initiatives are in development or on hold due to

social or political issues

Businesses must weigh out the benefits and challenges in their overall strategies

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Situation Analysis - Survey

Corporate sustainability programs are becoming more commonplace in the industry

Treasury & Risk, 2011

Question Yes No Don’t Know

Has your company assessed it’s carbon footprint? 28.6% 44.2% 27.2%

Does your company have a formal sustainability program or strategy?

51.7% 36.7% 11.6%

Do you view your financial institution relationships as partners in a sustainable treasury strategy?

49.0% 32.2% 18.9%

Are your company’s environmental strategies integrated with its business plan?

39.4% 39.4% 21.2%

Do you feel that by going green, your company will have a competitive edge in the marketplace?

39.7% 38.9% 21.4%

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Top Trends – Alternate and Renewable Energy Sources

Businesses are looking for alternate sources to power andoperate their buildings, plants, warehouses, and all facilities in order to reduce long term costs and eliminate carbon dioxide emission.

Solar Wind Hydroelectric Geothermal Biomass

Alternative energy sources eliminate carbon dioxide which contributes to global warming

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Top Trends – Paper Reduction

There has been on ongoing trend to reduce paper in the workplace forthe last 15 years. However, paper continues to be part of the businessworld as well as the medium of choice for many industries.

Recycle all paper and cardboard Purchase new paper with the following attributes:

Recycled materials, chlorine free, mercury free Print documents as double sided print outs Replace paper cups and utensils with reusable materials Use paper towels and tissues with recycled materials Read documents online and suppress all paper related statements

and management reports Suppress annual reports and 10K reports and make available online

Removing paper in the workplace is a key area for businesses to reduce costs

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Top Trends – Recycling and Waste Management

Recycling and disposing of waste in an efficient manner is a key component of any sustainability program.

Recycle all materials that can be recycled Paper, cardboard, glass, metals, plastic, electronics Keep recycle bins and containers near copy

machines, printers, break rooms, and restrooms Dispose, collect, and remove waste efficiently Donate or dispose large or high volumes of items like

equipment and furniture

Recycling and properly disposing waste is crucial to meeting green goals

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Top Trends – Transportation

Rising fuel costs and the proliferation of suburban living has increasedthe amount of travel time and expenses in all areas of business logistics.

Telecommuting/Remote offices Teleconferencing Carpooling Public transportation Alternative methods

Biking Walking

To meet the logistical demands of the current and future business environment, alternatives to traditional means are necessary

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Top Trends – Construction

Businesses are re-engineering how facilities and properties are developed and demanding more eco-friendly construction from owners.

Eco-friendly materials Reused and refurbished

Green landscaping Organics Automatic lighting and thermostats Sealed doors and windows Powered by alternate or renewable energy sources

Long term sustainability begins with the buildings that house raw materials and employees

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Top Trends – Office Management

The easiest way to begin a go green strategy is to start with human capital.

Employee rewards and programs Junk mail reduction Recycling centers Green landscaping/Indoor plants Green cleaning/Non-toxic products Telecommuting/Remote offices eNewsletters

The most successful sustainability programs start from the bottom up

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Top Trends – Technology

Moving from legacy mainframe and software based systems to the cloud is becoming essential to reduce overall support and energy costs.

Reduction in server farms and systems Decrease in backup and storage costs Elimination of installations and use of CDs and DVDs Efficient deployment of new applications and programs Save energy

Less facilities to store hardware Reduce temperature cooling for rooms

The faster businesses move to the cloud, the faster they realize savings

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Top Trends – Carbon Footprint and Offsets

Businesses are becoming more aware of their carbon footprint and using sophisticated tools to calculate and analyze their overall carbon dioxide (CO2) emissions. In addition, the use of carbon offset programs is gaining ground.

Carbon footprint Carbon offset

Carbon footprinting and using offset credits is a key component of any green strategy

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Top Trends – Carbon Footprint Calculation and Analysis

Businesses are applying scientific methods to determine their overall carbon footprint

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Top Trends – Cash Management and Banking

Businesses are seeking partnerships with their financial institutions tomeet their sustainable Treasury Management goals and green initiatives.

Paper to electronic migration Elimination of paper statements, notices, and advices Online banking

Reporting, Transaction initiation, Notifications Archive and data retrieval Back office system automation and integration

Financial institutions are uniquely positioned to partner with customers on green initiatives

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Situation Analysis - Survey

Corporate sustainability programs are becoming more commonplace in the industry

Treasury & Risk, 2011

Question Yes No Don’t Know

Has your company assessed it’s carbon footprint? 28.6% 44.2% 27.2%

Does your company have a formal sustainability program or strategy?

51.7% 36.7% 11.6%

Do you view your financial institution relationships as partners in a sustainable treasury strategy?

49.0% 32.2% 18.9%

Are your company’s environmental strategies integrated with its business plan?

39.4% 39.4% 21.2%

Do you feel that by going green, your company will have a competitive edge in the marketplace?

39.7% 38.9% 21.4%

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Online Banking SolutionsOnline banking platforms offer several modules that help businesses manage

treasury functions in a safe and secure session by eliminating paper statements and providing all reports online

Information Management Prior day, current day, multi-currency, historical transaction

reports Payment Initiation

ACH, Wire Transfer, Internal Transfer User Administration

User entitlements and permissions, dollar limit restrictions Alert Notifications Data Archive Other Modules

Lockbox, Remote Deposit Capture, File Management

Are you utilizing all of the online banking options available beyond basic features?

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Payables Solutions

Automated Clearing House (ACH) Direct deposit of payroll, vendor payments, employee

reimbursement, tax payments Wire Transfer

Vendor payments Internal Transfer Positive Pay F/X Payments Business Credit Card

Low dollar payments, travel and entertainment

Payables solutions reduce costs by migrating paper checks to electronic payments and automate processes to manage all payments online

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Receivables Solutions

Automated Clearing House (ACH) Premiums, dues, subscriptions

Wholesale Lockbox Business to Business (B2B)

Retail Lockbox Consumer to Business (C2B)

Remote Lockbox Remote Deposit Capture Intelligent Safes

Receivables and collections solutions eliminate incoming paper and send electronic data files for reconciliation and settlement

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Overall Go Green Solutions Paper to Electronic (P2E) Migration

Payables/Disbursements Receivables/Collections

Reports and Statements Eliminate all paper statements and checks Review all bank accounts online

Archive and Retrieval Generate all special reports online Search for transactions and specific items Stored data and reports

Automation and Integration File transfer (inbound/outbound)

P2E migration, online reporting and data archive and retrieval and automation and data integration are all key components to any sustainable Treasury Management strategy

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Resources Pay it Green - http://www.payitgreen.org/ Environmental Protection Agency - http://www.epa.gov/ The Green Office - http://www.thegreenoffice.com/ Treasury & Risk 2011 Going Green Survey Results -

http://media.treasuryandrisk.com/treasuryandrisk/article/2011/07/25/TR%20July11SurveyResults.pdf

JP Morgan White Paper Green Treasury Operations - http://www.jpmorgan.com/tss/General/Creating_A_Green_Treasury_Operation_Is_Easier_Than_You_Think/1271975461438

Carbon Footprint Business Analysis - http://www.epa.gov/climateleadership/smallbiz/footprint.html

Business Carbon Footprint Calculator - http://carbonfootprint360.com/p/business-carbon-footprint-calculator.html