Standard Chartered Bank paves the way for sustainable trade in Bangladesh
Standard Chartered Bangladesh has executed the country’s first sustainable trade finance transaction locally.
The bank provided sustainable trade finance support to Square Textiles, a subsidiary of Square Group, in supplying yarn made from sustainably sourced cotton to their local buyer Echotex Ltd under a Letter of Credit transaction, according to a press release.
Square Textiles Ltd is a manufacturer of sustainable yarn, produced from cotton that was sourced from sustainable cotton producers who are also members of the Better Cotton Initiative (BCI).
Better Cotton Initiative (BCI), is the largest cotton sustainability programme in the world, which was formed to register and recognize members within the textile and clothing industry who contribute towards and actively promote soil health, water stewardship, emissions reduction as well as social factors like decent work and diversity.
Standard Chartered Bank’s sustainable trade finance framework enables the identification of sustainable activities in the physical supply chain or manufacturing process and enables capital to be directed towards these to encourage and enable such activities.
One of the pillars in that framework is about financing sustainable goods that carry certifications from certain approved bodies, like the BCI.
Echotex Ltd is a 100% export-oriented ready-made garments company and is also a member of BCI, producing apparel from fabric made with sustainable yarn, and selling to global buyers who also want to sell goods produced under sustainable practices.
Naser Ezaz Bijoy, CEO of Standard Chartered Bank, Bangladesh said: “Our vision is to become the most sustainable and responsible bank, and the leading private sector catalyser for the Sustainable Development Goals where it matters most, across Asia, Africa and the Middle East.”
“Providing sustainable trade finance to Bangladeshi textile and garments industry is a big step towards realising this vision. As in terms of export of clothing Bangladesh is one of the leading countries in the ready-made garments sector in the world, there is a significant opportunity here to provide sustainable trade finance to our backward linkage manufacturers, who source sustainable cotton, and to our direct exporters, who produce using sustainable fabric and sell to retailers who are conscious about their sustainability footprint,” he added.
Tapan Chowdhury, chairman of Square Textiles, said: “Sustainability and concern for the environment should be a key consideration for any manufacturing business. It is certainly a key agenda here at Square Group. As one of the leading textile companies in the country, we are aware of our responsibility to lead by example, and hence we have invested heavily in our sustainability drive.”
Mohammad Bin Quasem, director of Echotex Ltd said: “Here at Echotex, we take our responsibility to the environment very seriously, which is why we use yarn and fabric produced with sustainable cotton to manufacture our products. Many of the retailers we export have BCI membership. In addition to our own concern for the environment, being sustainable is also commercially beneficial.”
He also added saying: “Standard Chartered’s sustainable trade financing program is an apt way to support us in our sustainability initiative.”
Standard Chartered Bank is the largest international bank in Bangladesh and has a track record of bringing in many firsts for the banking industry in the country.
Sustainable trade financing is the latest among many other “firsts” that the bank has introduced including the country’s first blockchain letter of credit last year.
Standard Chartered was the first bank to issue a Letter of Credit from Bangladesh and has since retained its position as one of the top trade banks in the country.
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