Helping To Weather The Storm With A Trade Bank For All Seasons

Helping to weather the storm with a trade bank for all seasons 11 Collaborating for a greener future Moving forward, environmental, social and governance (ESG) sustainability in supply chains is a big hurdle that corporates need to adjust to, with multiple shifts in sourcing policy. The industry appears to be seeing a big push from many clients to use their supply chains as a tool to help improve the ESG sustainability of their businesses — and collaboration can often be invaluable in this space. As depicted in Figure 8, corporates that have higher ESG scores appear to have suppliers that are deemed to be better ESG performers 7. The trend may accelerate further in this space as more corporates strive to coalesce around suppliers that are regarded as more sustainable. Citi is expanding its global supply chain finance capabilities for clients to include new sustainable finance solutions that are designed to help them meet their sustainability goals, including diversity and inclusion initiatives. Figure 8. Supplier ESG Score vs Company ESG Score Distribution Source: Citi Global Data Insights, Truvalue Labs, MSCI, Bloomberg Citi’s engagement with a third-party provider of business sustainability ratings is designed to help support Citi’s clients and their suppliers’ efforts to achieve sustainability performance targets and uphold best practice standards. The programme incorporates an incentivised pricing model for suppliers as a motivational tool to align with a company’s procurement sustainability goals, including ESG issues based on data and insights provided by the third- party verifier. By collaborating with experts in ESG solutions, such as ratings platforms (used to assess business sustainability), banks can deliver tools to help support clients’ journeys to green and help meet their ESG sustainability targets. Working with government agencies can further support clients’ sustainability and climate resilience aims. Through working arrangements with organisations such as the IFC and UKEF, for instance, clients may benefit from partial 7. Analysis done on MSCI World universe by using Truvalue ESG scores (ranges from 0 to 100) combined with supply chain data from Bloomberg. The green horizontal line in the box plot denotes the median of the score distribution for each ESG score bracket.