Multinational bank Standard Chartered has launched sustainable finance variants of Borrowing Base Trade Loans (BBTL).
BBTLs are structured to meet businesses’ specific financing requirements and allow them to obtain financing against a diverse pool of collateral, typically cash, inventory, or receivables.
The financing amount is tied to the borrowing base and varies according to the client’s needs, which allows clients to consolidate multiple transactions under a single loan.
The sustainable finance variants of the BBTL integrate environmental, social and governance (ESG) criteria into the financing process.
These variants include recognition of facilities that support the trade of eligible materials within the applicable borrowing base.
The sustainability-linked variants offer differential pricing for companies that demonstrate a commitment to and delivery of material and ambitious sustainability-related key performance indicators (KPIs) and associated targets.
Such KPIs include reducing carbon emissions, increasing the share of renewable energy within their energy supply, or improving diversity among their management teams.
The solution will be available in the United States, UK, UAE, South Africa, Singapore and Hong Kong, with further market launches expected in the future.
“By integrating sustainability variants into our BBTL solution, we’re helping to empower our UAE clients to adopt more sustainable practices. This aligns with our commitment to offering finance to help facilitate our clients’ transition towards more sustainable business practices,” commented Syed Khurrum Zaeem, Head of Transaction Banking, Africa & Middle East, Standard Chartered.
According to Standard Chartered, it has already rolled out a sustainable trade loan for Financial Institutions and an ESG-Linked Cash Account.