Citi has become the latest bank to roll out an ESG-focused trade finance proposition, with the launch of a sustainable trade and working capital (sustainable T&WC) loans solution in Europe, Middle East and Africa, Latin America and Asia Pacific regions.

The bank says the solution will support clients with their sustainability goals, where the proceeds of the loan are used for an environmental or social purpose. Should certain sustainability criteria be met, the solution can provide clients a framework for incentivised pricing.

“Under Citi’s trade and working capital business, we are closely working with our clients to support their supply chains and ecosystem transition to a sustainable, low-carbon business model that balances the environmental, social and economic needs of society,” says Peadar Mac Canna, head of Emea trade and working capital business at Citi. “Combined with our digital solutions, Citi’s sustainable T&WC loans allow clients to use loan proceeds for, or in connection with, ESG purposes.”

The bank defines these ESG purposes according to a number of external principles and standards, which include the UN’s Principles for Responsible Banking – a commitment to promote universal financial inclusion – and the International Labour Organization’s Core Conventions, which cover labour practices.

This new proposition follows the launch in November last year of Citi’s sustainability-linked supply chain finance programme in the Asia Pacific region, which offers cheaper financing to suppliers that hit sustainability indicators, and marks the latest in a series of ESG-related offerings by trade finance banks.

In March last year, Standard Chartered launched a set of sustainable trade finance solutions across its footprint, which embed the Loan Market Association’s (LMA) green and sustainability-linked loan principles into its offering. Meanwhile, in December, HSBC introduced science-based emissions reduction targets into its sustainable supply chain finance programme with US retail giant Walmart.

Citi says the sustainable T&WC loans product will initially launch in 80 countries across the Emea, Latin America and Asia Pacific regions, and will be further rolled out across North America throughout 2022.