Awareness of ESG has reached the next level as a result of Covid-19. It is becoming more relevant not just for SMEs but also large conglomerates with a number of suppliers. Asian corporates and transaction banks in the region have come up with various solutions that are helping to advance awareness and broaden the ESG landscape.
The increased ESG conversations kick off the first set of winners in The Asset Triple A Treasury, Trade, SSC, and Risk awards for 2020. This year’s edition, conducted as Covid-19 started to spread, is the first time in the awards’ history when face-to-face meetings with banks and corporates have not been possible. Notwithstanding this, the board of editors was delighted to see the number of conversations, over video and conference calls, increase by more than three-fold. This reflects the unprecedented nature of this health emergency and its impact on the treasury, trade and supply chain function.
Even before Covid-19, ESG awareness is well underway. Poverty alleviation, as the first and top goal in the United Nations SDG (Sustainable Development Goals), has seen impressive progress in Asia with more treasury solutions addressing poverty.
Jiangshan Agrochemical & Chemicals, a leading Chinese producer, utilized a supply chain finance solution from DBS to shorten the cash conversion cycle for its product distributors. The solution allows farmers to receive the agrichemical products first, and then use them on their crops until harvesting. Another solution commended as a trailblazer is for Unilever. Working with BNP in Singapore, the bank provided a pre-shipment financing to the multinational’s suppliers — small tea farmers in Central Africa — based on blockchain technology.
Apart from supply chain finance, digital payment is now being deployed for the benefit of farmers using recently established national payment and collection infrastructure. In Indonesia, Cargill partnered with Deutsche Bank using the ATM Bersama network to allow farmers to be paid faster with the sighting of funds made almost instantaneously. Similarly, the Hyderabad Agriculture Cooperative Association in India managed to automate procurement and farmer’s payment online, through a payment and collection solution from IndusInd Bank.
To support education infrastructure, Paul Y. Engineering Group secured a HK$150 million (US$19.2 million) green trade loan from HSBC for the construction of a 1,224-place student residence at Wong Chuk Hang for the University of Hong Kong. A pilot project using modular integrated construction, it was backed by the Development Bureau of Hong Kong. In Malaysia, Pontian Pei Chun Chinese Schools adopted a virtual account solution from UOB that enabled students to make online payment in less developed areas.
In renewable energy, offshore wind farm projects are taking off across Asia. Siemens Gamesa China was able to secure financing and discounting options for the company’s suppliers to optimize working capital through a solution from Bank of America. In Thailand, Provincial Electricity Authority worked with Kasikornbank to launch a digital payment for retail customers to purchase renewable energy.
The best solutions from the more than 300 submitted for The Asset Triple A Treasury, Trade, SSC and Risk Awards 2020 will be featured in the coming weeks. Stay tuned.
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