Singapore’s DBS has provided a US$50mn trade finance facility to Glencore subsidiary Viterra, linked to sustainable sourcing of palm oil products.
Under the working capital loan, Viterra will receive preferential pricing providing it hits targets relating to sustainability in its supply chains.
A DBS spokesperson tells GTR the targets involve ensuring that the palm oil and palm kernel expeller (PKE) are traceable to the mills Viterra purchased them from, and that the trader’s suppliers are members of the Roundtable on Sustainable Palm Oil or have committed to no deforestation, no peat and no exploitation policies.
Viterra has already met those goals for most of its volumes, the spokesperson says, and the targets aim to maintain or increase the volumes covered by the sustainability commitments over the life of the loan.
The palm oil industry has long been at the centre of concerns over deforestation, which contributes to climate change, biodiversity loss and the shrinking habitat of endangered species such as orangutans and Sumatran rhinos. Human rights groups have also highlighted labour exploitation issues in the sector.
Viterra, which began trading physical palm oil cargoes in 2021, sources its products from Indonesia and Malaysia. At the Cop27 summit last year the company signed up to the Agriculture Sector Roadmap to 1.5°C, an initiative aimed at reducing emissions from agriculture.
“Viterra is pleased to partner with DBS to establish this sustainability-linked finance facility which supports the emphasis Viterra places on sustainability,” says Joanna Lim, the company’s executive manager for Asia.
“We recognise the demand from customers for sustainable products, and we are committed to supporting industry initiatives. Across our network, we want to drive change to meet the demand of consumers while preserving the same opportunities for future generations.”
Mark Troutman, DBS’ group head of sales, global transaction services, says: “By working closely with like-minded clients like Viterra, DBS’ goal is to develop practical solutions for large and small corporates alike, to enable greater supply chain transparency and traceability to pave the way to a green transition.”
Last month Viterra refinanced its A$800mn (US$533mn) sustainability-linked borrowing base facility, led by the Commonwealth Bank of Australia, which included more ambitious sustainability targets in the grain, protein meals and cotton sectors.