Dive Overview:
Standard Chartered has developed a corporate banking product that links clients’ ESG performance to the pricing of interest rates and fees. The British bank announced this week.
The bank said its ESG-linked cash accounts will link interest rates to clients’ ability to meet their environmental, social and governance goals. The key performance indicators chosen must be “material and relevant to a client’s business,” according to Monday’s announcement.
Standard Chartered will pilot the program in Hong Kong and Singapore, but plans to roll it out to other markets “over time,” the bank said in a statement. More and more jurisdictions are in agreement Compliant with International Sustainability Standards Board climate disclosure.
Dive Insights:
Standard Chartered said ESG targets linked to client accounts must be “ambitious” relative to external benchmarks, client peers and/or the client’s past performance. The ESG-linked accounts will add to the bank’s London-based transaction banking team’s range of sustainable products, according to the announcement.
Mahesh Kini, global head of cash management, transaction banking at Standard Chartered Bank, said in a release that the launch of the product follows the bank’s commitment to empower clients “to achieve both their financial and sustainability goals.”
“As companies move from sustainability ambition to implementation, banks have a key role to play in enabling and incentivizing companies on this journey,” Kini said.
The bank also said:Sustainable AccountThis will enable clients to meet their cash liquidity requirements and use excess cash for activities in support of the UN 2030 Sustainable Development Goals.
Standard Chartered’s transaction banking suite includes: Financing instruments to support the development of sustainable products suppliers, renewable energy, sustainable infrastructure, transition industries etc. The bank also Green loans to other financial institutions To provide liquidity to support sustainable development.
In Hong Kong and Singapore, Standard Chartered Bank is targeting two test markets where companies will be required to comply with climate-related disclosures in line with the ISSB’s Climate-Related Disclosure Standard. IFRS S1 and S2 Framework It will start in 2025.
In April, the Hong Kong Stock Exchange announced that all listed companies Comply with climate-related disclosures more in line with the IFRS S2 framework Climate-related disclosures will be required on a phased basis based on size for financial years beginning after January 2025. However, all public companies will be required to track Scope 1 and 2 greenhouse gas emissions for reporting purposes from January 2025.
Singapore’s Corporate Finance Regulatory Authority, along with the country’s securities regulator, issued a statement in February saying: Companies are required to make disclosures in accordance with ISSB standards. Scope 1 and 2 emissions will be disclosed for reporting years beginning in 2025, with Scope 3 to be disclosed in 2026. Companies with annual revenues of more than $1 billion and assets of more than $500 million will have until fiscal year 2027 to begin disclosing.
