SCB executes sustainable trade finance transaction

Standard Chartered Bangladesh has executed 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, the bank said in a statement on Tuesday.

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).

BCI 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 per cent 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.

Standard Chartered Bank, Bangladesh CEO Naser Ezaz Bijoy 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 readymade 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.”

Square Textiles Chairman Tapan Chowdhury 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. We are sourcing cotton now from BCI member suppliers and also selling our yarn to exporters whose ultimate buyers are retailers aligned with sustainability.”

Echotex Ltd Director Mohammad Bin Quasem 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 to have BCI membership.”