Transition finance is a key part of Standard Chartered’s future road map
The business of transition finance is fraught with challenges, from a lack of clarity on taxonomies, regulations and incentives, to the high cost of decarbonisation in certain sectors.
Where others see challenges, however, Freddy Ong sees opportunities. In particular, the head of client coverage in Singapore for corporate, commercial and institutional banking (CCIB) at Standard Chartered finds chances to create value by providing innovative financing solutions.
In my view, transition finance is the way forward,” said Ong, on his medium-term focuses for the bank.
As part of its commitment to reaching net-zero carbon emissions in its operations by 2025, and in its financing activity by 2050, Standard Chartered provides client solutions in three aspects: climate risk assessment; environmental, social and governance (ESG) advisory; and transition finance.
These solutions encompass services such as investment banking and strategic analysis on decarbonisation levers – primarily in the highest-emitting sectors of oil and gas, metals, mining and transport – as well as structuring financial solutions.
Supporting our clients’ transition journey is the responsible thing to do,” said Ong, who noted that not every company can “leap” away from its current way of doing business to a significant reduction in its carbon footprint. “That’s where we come in: to direct capital and climate solutions to where they’re needed most.”
Targeted solutions
Doing this is not easy, however, due to an increasingly volatile environment – interest rates remain high, and macroeconomic headwinds continue to buffet businesses.
Some of the bank’s clients, Ong said, have turned more cautious in this difficult environment.
For companies, raising funds has become more challenging.
As the business landscape evolves with new types of projects and more digital innovations, the way companies raise funds and manage their capital must become more innovative,” said Ong.
Standard Chartered is therefore catering to clients’ specific needs through innovative and targeted financial solutions. In 2022, the bank launched a “sustainable account” for corporates in Singapore, which allows clients to embed sustainability in their cash management.
In January, it closed a USD200 million sustainability-linked trade finance facility for mainboard-listed agribusiness giant Wilmar International.
Standard Chartered also supports its clients by advising on and financing their decarbonisation and energy transition activities.
It offers traditional banking products such as project and export finance, bonds, loans, and mergers and acquisitions; it also has an extensive suite of sustainable and transition finance solutions.
People-centric agenda
The bank’s pursuit of sustainability does not stop at just product and service offerings, though. Its efforts also run into a key component of ESG: its people.
Ong said a successful talent agenda goes beyond just hiring the right people: “A people-centric agenda is needed to unlock the full potential of our workforce, (to) deliver effectively on our business priorities.”
He believes in providing opportunities to grow local talent, having been a beneficiary of such chances himself.
For instance, Standard Chartered offers a work-study programme designed to provide students with relevant skills and help them enter the workforce after their studies.
In June this year, the bank also launched the global CCIB Future Banker Programme. This aims to upskill some 2,000 frontline employees worldwide, by equipping them with extensive product and technical knowledge.
The programme will be reinforced with coaching sessions, to support the evolution of an employee’s career, Ong said.
All employees under Standard Chartered’s CCIB arm are also trained in the basics of sustainable finance, as part of the bank’s commitment to sustainability and transition finance.
The bank helps all frontline staff be fluent in sustainable finance, so they can support clients end to end.
CCIB employees in Singapore can also take further ownership of their careers through the bank’s mobility programmes. These allow employees to participate in overseas assignments or placements, as well as explore roles across the bank while based in Singapore.
This breadth of diversity, Ong said, enables the team to make impacts across markets while retaining the strength of its rootedness in Singapore.
He added that incorporating both sustainability and transition financing into the business, as well as developing the talent pool, have benefited Standard Chartered’s CCIB arm.
He expects these efforts to continue driving the bank’s growth.
“As I always tell my team, opportunities don’t just happen. We have to take control and create them ourselves.”
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