Insight & Analysis

Press release: Standard Chartered and ADM in US$500m Sustainable Export Letter of Credit programme

Published: Aug 2022

11th August 2022 – Standard Chartered and ADM (NYSE:ADM) today announced the successful execution of the Bank’s first Green Trade Export Letter of Credit (LC) programme in Singapore, London and New York. Issued under the “Sustainable Goods” pillar of the Bank’s Sustainable Trade Framework, the transaction helps advance ADM’s widening efforts to expand sustainable farming practices and source sustainably produced goods.

Newspaper press release

The commodities underlying this USD500m programme are mainly soybeans, oilseeds and cotton, with flows originating from Latin America, the US, and Australia to European markets. Third-party issued approved sustainable goods certifications from Round Table for Sustainable Soy (RTRS)1, US Sustainable Soy Assurance Protocol (SSAP)2, International Sustainability & Carbon Certification (ISCC)3 as well as Better Cotton Initiative (BCI)4 are issued and evidenced as part of the transaction structure.

The transaction, which demonstrates both Standard Chartered and ADM’s commitment to sustainability, supports supply chain trackability and greater adoption of sustainable farming and production practices, promoting positive impacts on resource efficiency, deforestation, energy use and social impact.

“Sustainability powers our strategy, and is foundational to our purpose as a company,” said Olivier Boujol, ADM vice president and global head of Structured Trade Finance. “With an integrated value chain spanning food and agriculture, ADM is uniquely positioned to drive sustainable practices across our industry, and we’re continuously scaling up our efforts to power positive change. We’re proud to work with Standard Chartered to support and encourage sustainable agriculture and food production from the farm gate to the dinner plate, and we look forward to continuing to expand our structured trade efforts in sustainability.”

Kai Fehr, Global Head of Trade & Working Capital, Standard Chartered, said: “Our clients are increasingly prioritising sustainability across their supply chain ecosystem, which is not only important to their business agenda but also ensures a more resilient growth for the wider economy. As a longstanding trade bank, we have an incredibly important role to play in helping to make global supply chain activities more sustainable. The successful execution of this Export LC programme is testament to the significant opportunity we have in catalysing finance to scale impact, by complementing ADM’s sustainable procurement processes with our tailor-made sustainable trade finance offering to advance their sustainability goals.”

From supporting sustainable farming practices, to improving the efficiency of its own operations, to offering a vast and growing portfolio of plant-based foods, fuels and other products, ADM is committed to expanding sustainable practiced across the food and agriculture value chain. Earlier this year, ADM announced a $20 million commitment to supporting cover crops in the American Midwest, supporting lower-carbon crop production. The company continues to advance its Strive 35 Goals to reduce greenhouse gas emissions, energy intensity, water usage, and waste to landfill. In 2021, the company announced a plan to reduce Scope 3 emissions by 25% by 2035, and last year, ADM accelerated its deadline for a completely deforestation-free supply chain by five years, from 2030 to 2025. ADM also recently committed to work with the Science-based Targets Initiative with the aim of obtaining approval of its climate targets and alignment with ambitious global goals to limit rising temperatures to 1.5 degrees Celsius.

Standard Chartered aims to embed sustainability and responsibility into everything it does as a bank and to be the leading private catalyser of finance for the Sustainable Development Goals (SDGs) where it matters most, across its footprint and to achieving its Net Zero 2050 goal.

To do so, the Bank looks to catalyse finance and partnerships to scale impact, capital and climate solutions to where they are needed most, including a plan to mobilise USD300 billion in green and transition finance between 2021 and 2030. It recently launched sustainable trade finance solutions across Asia, Africa and the Middle East, Europe and the Americas to help companies implement more sustainable practices and build more resilient supply chains.

Footnotes
  1. RTRS is a global non-profit organisation promoting the growth of production, trade, and use of responsible soy. It sets the standards for both responsible soy production and chain of custody.
  2. The US SSAP is a respected industrywide initiative that demonstrates US soy’s commitment to responsible growing practices and sustainability through setting clear, verifiable standards of industry practice.
  3. ISCC offers solutions to address sustainability requirements for all feedstocks and aims to provide solutions for a fully traceable and deforestation-free supply chain.
  4. BCI is the world’s leading sustainability initiative for cotton. Their mission is to help cotton communities survive and thrive, while protecting and restoring the environment.

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