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.
