Perspectives 2019 2020 Public Sector

70 New Perspectives on Trade Finance Once the definitions of ESG and green trade lending are clarified, corporates and banks will then need to demonstrate that they are monitoring compliance and reporting transparently, or else run the risk of accusations of ‘greenwashing’ and the associated reputational damage. How this will happen, and how the data will be collected and transmitted, is far from being standardized. However, given growing demand, we expect to see increasing innovation from banks on ESG issues and clarity on sustainable trade finance lending. Of course, sustainability not only relates to environmental issues. Citi has collaborated with development institutions to help stimulate the growth of trade in emerging markets and to support economic development. Citi’s Export Agency Financing business works in partnership with development banks and export credit agencies around the world to finance a variety of sustainable projects, including renewable energy, energy efficiency, public mass transit and water conservation. In response to corporates’ increasing focus on improving the sustainability of their supply chain, Citi is working on innovative supply chain financing solutions that would incentivize suppliers to adopt a more sustainable business model and operations. Since the IFC’s Global Trade Liquidity Program was launched by IFC and Citi in 2009 it has financed a total trade volume of $29 billion, with around $4.5 billion in International Development Association countries (the World Bank Group fund for the world’s poorest countries), and $11.1billion in low income and lower middle-income countries. Most recently, the IFC and Citibank created a $1.2 billion risk-sharing facility to help stimulate the growth of trade in emerging markets and to support economic development. Citi provided £800 million in financing for Hornsea 1, guaranteed by Denmark’s EKF, in the largest wind financing by a public export credit agency. Wind turbines do not release emissions that can pollute the air or water, and they do not require water for cooling. Wind turbines may also reduce the amount of electricity generation from fossil fuels, which results in lower total air pollution and carbon dioxide emissions.