The loans will help two of the bank’s clients in Singapore’s food supply chain build on their sustainability initiatives and strengthen their supply chain resilience.
UOB has extended its first green trade finance facilities under the Green Finance Industry Taskforce’s Green and Sustainable Trade Finance and Working Capital Framework to palm oil and derivatives products producer Musim Mas and aquaculture company Barramundi, the bank said in Wednesday.
Muslim Mas, which has been incorporating sustainability into its corporate agenda, will use the funds to supporting its working capital needs, in particular its sourcing of certified palm oil from responsible suppliers. Barramundi will further its sustainability initiatives to contribute to greater resilience and security in the seafood ecosystem, and source sustainable raw materials as part of its adoption of innovative solutions such as using climate-resilient and sustainable technologies.
We are actively engaging our clients to reinforce the importance of sustainability to their business… Our collaborative approach helps to drive greater market adoption for green financing and encourages more businesses to advance responsibly, Frederick Chin, UOB head of group wholesale banking and markets, said in the announcement.
UOB’s sustainability chief Eric Lim previously said the bank wants to help businesses advance responsibly on their sustainability journey and help their business models transition, as part of its goal of reaching $15 billion in sustainability loans by 2023.
To qualify for green trade financing, companies must have a clear sustainability strategy and provide documents that show how the funds will be used, UOB noted. Companies also need to submit records that demonstrate the positive sustainability outcomes from their business activities or trades related to green trade financing.
UOB highlighted, citing Singstat data, that more than S$1 trillion worth of trade 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, Chin said