Singapore lender UOB has extended green trade finance facilities to two clients to help them build on their sustainability initiatives and strengthen their supply chain resilience. The clients are Musim Mas Group, a global distributor of palm oil and its derivative products, and Barramundi Group, an aquaculture company.
The facilities are the first to be granted by the bank under the Green Finance Industry Taskforce’s green and sustainable trade finance and working capital framework launched by the Monetary Authority of Singapore on May 19. The framework serves as a guide for climate-related disclosures by financial institutions in the city state.
In order to qualify for green trade financing, companies must have a clear sustainability strategy and provide documents showing how the funds will be used. They also need to submit records that demonstrate the positive sustainability outcomes from their business activities or trades related to the green trade financing.
Frederick Chin, head of the bank’s group wholesale banking and markets, says: “As part of forging a sustainable future, we are actively engaging our clients to reinforce the importance of sustainability to their business. To that end, we have been sharing our expertise on how they can use sustainable finance products and solutions to ramp up their sustainability drive simply and effectively. Our collaborative approach helps to drive greater market adoption for green financing and encourages more businesses to advance responsibly.
“Companies that qualify for a green trade financing facility have taken steps to mitigate their environmental, social and governance risks such as identifying suppliers with good overall management practices and building more resilient supply chains. They are also at the forefront of an industry megatrend. There is more than S$1 trillion (US$750 billion) worth of trade that flows through Singapore, of which more than S$90 billion meets the requirements of being green and sustainable. These trade flows provide an immense opportunity for us to work with companies to offer green trade financing and to support their trade flows through our regional network capabilities.”
The green trade financing for Musim Mas Group will be channelled towards supporting its working capital needs, in particular its sourcing of certified palm oil from responsible suppliers. The palm oil giant, whose activities range from plantations to production of consumer goods such as cooking oil and personal care products, is a frontrunner in incorporating sustainability into its corporate agenda. Apart from significantly reducing greenhouse gas emissions through activities such as the installation of methane capture facilities, the group has also rolled out a programme to help small farmers produce palm oil sustainably.
The bank is also supporting Barramundi Group in furthering its sustainability initiatives to contribute to greater resilience and security in the seafood ecosystem. Barramundi Group, a leading barramundi aquaculture firm with operations in Singapore, Australia and Brunei, is expanding its sustainability initiatives to support Singapore’s “30 by 30” vision – to produce 30% of Singapore’s nutritional needs locally by 2030. To do so, it has obtained green trade and working capital facilities from UOB for sourcing of sustainable raw materials as part of its adoption of innovative solutions such as using climate-resilient and sustainable technologies.
