Banks expand sustainable supply-chain finance offerings
Big transaction banks are responding to corporate customer demand for sustainability linked supplier-finance programmes by extending the geographical availability and range of the products they offer.
Surveys sometimes throw up unexpected results. For example, around four in five of the US companies that participated in the latest Coalition Greenwich annual US large corporate banking study have established some organizational environmental, social and governance goals – no surprise there – yet only 2% said a bank’s level of commitment to ESG played any role in cash management provider selection.
This was not limited to cash management. Only 4% of respondents said they included expertise in sustainable financing as a condition when picking a trade finance provider.
Sustainability is a growing part of businesses’ overall operating models
Despite this, trade finance banks have been busily expanding their programmes. Standard Chartered’s sustainable trade finance solutions have been available for almost two years now, while in late 2021 Citi introduced a sustainability linked supply-chain finance programme in Asia.
Citi is seeing an increased focus on the importance of ESG in working capital financing, according to Chris Cox, the bank’s global head of trade and working capital solutions.
“Previously, we primarily saw sustainability being considered when making investment decisions, such as buying plant and machinery to create an infrastructure in line with sustainability goals,” he says.