The bank has introduced sustainability-linked supply chain financing in APAC.
Citi has announced its first sustainability-linked supply chain finance (SSCF) program in the Asia-Pacific region has been implemented for German company Henkel.
As part of the program, Citi intends to support its clients to advance their ESG priorities, improve supply chain resilience and manage working capital requirements.
Suppliers who demonstrate strong or improving sustainability performance will be able to access Citi’s supply chain financing at preferential rates, with rates improving on a tiered basis as the supplier’s sustainability score also improves.
Sustainability performance will be assessed by Henkel with the support of a global leading sustainability assessment agency.
The program has initially launched with the chemical and consumer goods company’s suppliers in Australia before expanding to additional markets in the coming weeks.
Citi’s Asia-Pacific sales and marketing head of treasury and trade solutions, Ernesto Pittaluga, said the bank was proud to collaborate with Henkel in a first for both companies in the region.
“Like Henkel, our ESG commitments are an essential part of our firm’s strategy, and these commitments are deeply integrated into our business and long-term priorities,” said Mr Pittaluga.
“We are committed to introducing new and innovative ESG-linked solutions for our clients in Asia-Pacific and look forward to expanding the use of our SSCF program in the region.”
Citi said the program aligns with its ESG commitments globally, which include a US$500 billion environmental finance goal and a US$500 billion social finance goal by 2030.
“In Australia we have certainly observed the prioritisation of sustainability goals amongst our corporate clients, and we are thrilled to be selected as Henkel’s launch market for their sustainable supply chain finance program,” said Citi treasury and trade solutions country head for Australia and New Zealand Scott Southall.
“Citi Australia supports over 300 suppliers and is well positioned to help our corporate clients leverage financing incentives to achieve strategic alignment with their suppliers on ESG.”
Henkel’s regional head of finance, Asia-Pacific, Christoph Wenner said the program demonstrated that sustainability was at the heart of its strategic priorities.
“We are convinced that sustainability-linked supply chain financing can help improve sustainability across Henkel’s large supplier ecosystem in Asia-Pacific,” he said.
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.
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