Standard Chartered Bangladesh (SCB) has introduced 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, said 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), which is the largest cotton sustainability programme in the world, 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 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 which carry certifications from certain approved bodies, like the BCI.
Echotex Ltd is a 100 percent export oriented ready-made garments company.
They are also members of BCI, producing apparels 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, "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 Ready-Made Garments sector in the world, there is 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.
“This presents a good opportunity to promote sustainability across the cotton supply chain. We are extremely proud to partner with Square Textiles Ltd with which our journey goes back to its inception and more recently established client Echotex. It is really delightful to witness that regardless of the vintage of relationships, there is strong alignment of passion for sustainability," he said.
Tapan Chowdhury, Chairman of Square Textiles, said "We are sourcing cotton now from BCI member suppliers and also selling our yarn to exporters whose ultimate buyers are retailers aligned with sustainability. Thus, we are contributing to end-to-end sustainable cotton initiative across the textile and garments supply chain.”
