Standard Chartered has agreed a $435 million sustainability-linked revolving credit facility with agribusiness COFCO International, which has been designed to support responsible agriculture supply chains in South America.
The financing structure has been developed around social and resilience performance targets, with Standard Chartered stating that it represents the first publicly disclosed sustainability-linked loan in South America’s agriculture sector to be focused entirely on impacts in these areas.
‘An important step’
“Leveraging our sustainable finance expertise to help close Standard Chartered’s first social resilience themed sustainability linked loan is an important step,” commented Marisa Drew, chief sustainability officer, Standard Chartered.
“Sustainability-linked financing has principally revolved around mitigating GHG emissions and managing environmental risks and impacts of business operations, however for COFCO International, we have used our deep supply chain expertise to structure a transaction that focuses on addressing social and resilience risks to their global supply chains.”
The credit facility aligns financial conditions with two externally verified key performance indicators: increasing the volume of grains and oilseeds certified under recognised responsible agriculture standards, and strengthening supplier due diligence and labour safeguards in Brazilian soy and corn supply chains.
‘Deep integration’
As Helen Song, chief financial officer, COFCO International added, the facility represents the “deep integration” of the firm’s sustainability goals with corporate financial management.
“By linking financing to measurable progress in certified sourcing and supplier due diligence, the structure supports the continued expansion of responsible and certified sustainable agricultural supply chains and improved market access for producers,” she said.
As Standard Chartered noted, while South America’s agriculture industry plays a key role in global food and feed supply chains, the region is increasingly exposed to climate volatility and social risk, necessitating the need for stronger land-use governance, responsible sourcing and supply chain oversight.
Wan Thonh, head of coverage, Singapore and ASEAN, Standard Chartered, added that the credit facility represents the bank’s “commitment to progress commerce in a way that delivers real impact for our clients, markets and communities”, as well as representing a milestone in the bank’s relationship with COFCO International. Read more here.
