Standard Chartered’s Sustainable Export LC Programme Takes Root

In August 2022, Standard Chartered announced successful execution of its first Green Trade Export Letter of Credit (LC) programme. The programme was set up for ADM, one of the world’s largest nutrition companies. As described in a press release issued by the bank, the transaction “supports supply chain trackability and greater adoption of sustainable farming and production practices”.

Contacted by DCW, a spokesperson for Standard Chartered explained that the programme enables “ADM to come to Standard Chartered for ‘qualified LCs’ issued by any [financial institution] for seeking confirmation and discounting. The programme is the first of its kind. The LC enables greening the supply chain right from procurement to the final use of the underlying commodities which qualify within the programme parameters.”

According to the bank, the commodities underlying the USD 500 million programme are primarily soybeans, oilseeds, and cotton, with flows originating from Latin America, the United States and Australia to European markets. USD 500 million is the value of total LCs that will remain confirmed/ discounted and outstanding at any point in time.

Third-party issued approved sustainable goods certifications from specified sustainability organizations and initiative bodies are issued and evidenced as part of the transaction structure. As explained to DCW, the certificates are those which are relevant to ADM and also form part of Standard Chartered’s Green and Sustainable Product Framework. They are part of the programme terms and are stipulated as transaction documents required for presentation by terms of the LC.

Since its first Green Trade Export LC for ADM, Standard Chartered has executed more transactions under sustainable export LC product variants for different clients.