Standard Chartered has launched what it says is the first sustainable supply chain finance programme in the Middle East, in partnership with Majid Al Futtain Retail, operator of the Carrefour franchise in the region.
The programme, which is now being piloted with some of the company’s most active suppliers in the United Arab Emirates, gives favourable financing terms to suppliers that meet sustainability criteria such as using energy-efficient equipment, employing fuel efficient vehicles and minimising landfill waste.
The scheme will shortly be extended to all of the company’s suppliers across the Middle East, Africa and Asia.
“Through this innovative programme, we are not only supporting our supplier partners, moreover, we are also introducing and incentivising them to adopt sustainable practices within their operations,” says Hani Weiss, CEO of Majid Al Futtaim Retail.
This is the latest in a series of sustainable supply chain finance programmes within the retail sector. In 2019, HSBC developed the first such scheme, enabling Walmart suppliers that demonstrate progress in The Sustainability Index, powered by The Sustainability Consortium’s measurement and reporting system, or through the retailer’s Project Gigaton, to apply for improved financing.
Last year, supermarket chain Tesco became the first UK retailer to offer sustainability-linked supply chain finance to its supplier base, through a programme with Santander, which also rolled out a similar programme in May for multinational retail conglomerate Sonae in Spain and Portugal.
Standard Chartered’s programme for Majid Al Futtaim is being delivered as part of the sustainable trade finance proposition it unveiled last year, which embed the Loan Market Association’s (LMA) green and sustainability-linked loan principles into the bank’s offering. The first green trade finance facility under the initiative was launched in September 2021, supporting efforts by UAE-based Amplus Energy Solutions to boost its solar power generation business. This was followed by a sustainable receivables finance facility for Siemens’ United Arab Emirates arm in October this year.
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