We’ve executed our first ESG-linked derivative

First commodity-linked derivative to ESG performance of Trafigura

Singapore, London – Standard Chartered announced today that it has priced its first commodity hedge linked to Environmental, Social and Governance (ESG) benchmarks with Trafigura, a leading commodity trading client.

The transaction involves combining conventional derivatives risk management with sustainability-linked key performance indicators (KPIs) that are linked to reducing greenhouse emissions – from owned or controlled sources – and to sustainable sourcing in the base metals business.

This transaction is structured to offer a premium or discount to Trafigura on their hedging rate based on fulfilling the pre-agreed ESG KPIs, which are independently monitored and reported on regular basis by a leading third-party provider, ERM Certification and Verification Services.

Chin Hwee Tan, CEO of Trafigura, Asia-Pacific, said: “We are committed to embed sustainability in our day-to-day operations in a consistent and coherent way. A key pillar of our responsible business practices involves minimising adverse impacts on the natural environment. This sustainability goals-linked derivative transaction with Standard Chartered is an important step forward on our journey.”

Sharad Desai, Global Head of Financial Markets Sales at Standard Chartered, said: “We are committed to getting capital to where it is needed to help our clients achieve their sustainability goals, and ESG-linked derivatives are among a number of solutions that we offer them. We’re proud to structure this first ESG-linked derivative transaction for Trafigura to help them execute both on risk management and sustainability targets.”

For further information please contact:

Josephine Wong
Standard Chartered Bank
+65 6596 4690
josephine.wong@sc.com

Shaun Gamble
Standard Chartered Bank
shaun.gamble@sc.com