Standard Chartered has launched a revolving credit facility (RCF) that offers borrowers pricing incentives to hit sustainability targets, with a primary focus on commodities companies.
The product adds sustainable finance variants to Standard Chartered’s existing borrowing base trade loans, which are RCFs secured against collateral such as cash, inventory or receivables.
The bank says facilities will incorporate various ESG targets, such as reductions in carbon emissions, increases in the share of renewable energy within a borrower’s portfolio, or improvements in management team diversity. It then offers differential pricing for companies that deliver on those targets.
“By integrating sustainability variants into our [borrowing base trade loan] solution, we’re helping to empower our clients to adopt more sustainable practices,” says Sofia Hammoucha, Standard Chartered’s global head of trade and working capital.
“This aligns with our commitment to offering finance to help facilitate our clients’ transition towards more sustainable business practices.”
Standard Chartered says the facility is initially being made available in Hong Kong, Singapore, South Africa, the UAE, the UK and the US, and it plans to offer it in other markets in the future.
The bank cites financing of critical metals that support the energy transition as an example of an eligible transaction.
The announcement follows last month’s launch of a sustainable trade loan offering, targeted at financial institutions.
That product allows Standard Chartered’s bank clients to finance trade flows linked to sustainable development, such as installation of wind turbines, purchases of solar panels and sales of battery systems.
Loans are referenced against a green and sustainable product framework authored in partnership with ESG ratings and data provider Morningstar Sustainalytics.
