A UOB-led consortium of four major banks has tied up with Singapore Trade Data Exchange (SGTraDex) to develop digital services to apply “clear and consistent” cross-industry standards for green trade financing, the Singapore bank said in a press release on its website Tuesday.
“The initiative aims to enable effective, data-driven decision-making around environmental, social and governance (ESG) factors so that banks can better support their clients’ green trade financing needs. This serves to support Singapore’s role as a leading green trade finance hub regionally and globally,” UOB said in the statement.
The initial target industries for the pilot, which begins end-November, will include agriculture, real estate and construction, the statement said.
UOB, a member of the Monetary Authority of Singapore’s (MAS) Green Finance Industry Taskforce (GFIT), is leading the consortium, which includes DBS, OCBC Bank and Standard Chartered, the statement said.
The initiative aims to build a model for transparent green trade financing data exchange in a centralised repository, using SGTRaDEX infrastructure, for banks to validate green certification data, the statement said, adding this would allow the extension of green trade financing in a simpler, quicker and more accessible way.
Antoine Cadoux, CEO of SGTraDex, said the initiative would enable verifiable decision-making for green and sustainability-linked trade financing, which is crucial to building Singapore’s role as a green trade finance hub.
So Lay Hua, head of group transaction banking at UOB, said the initiative follows the bank’s provision of green trade finance facilities under a GFIT framework earlier this year.
“A more transparent and efficient process will help businesses advance their green initiatives and strengthen their supply chain resilience. This will help boost the sustainability of Singapore’s supply chains and reinforce the country’s status as a green trade finance hub,” she said in the statement. “The new development will also further drive overall capability-building efforts and encourage more companies to adopt sustainability best practices.”