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Industry roundup: 19 August

Contour and GSBN partner to drive digitisation across global shipping industry

Digital trade finance network Contour has partnered with the Global Shipping Business Network (GSBN) to offer an end-to-end digital solution for all participants involved in trading, financing and shipping goods around the world. 

Pandemic-induced lockdowns and the subsequent explosive growth in e-commerce, have pushed the logistics industry to its limits, but inefficient manual processes are still commonplace and are creating bottlenecks. GSBN’s blockchain-enabled operating system and its product Cargo Release enables digital sharing of verified logistics and cargo data. This streamlines business operations across the whole supply chain, cutting the time for cargo to be document ready for release from days to a matter of hours.

The partnership with Contour’s network, which digitises paper-based trade finance processes such as letters of credit (LCs), will drive interoperability for users of both solutions. By harnessing both solutions, corporates can experience a seamless connection between the physical supply chain and the financial system.

The partnership aims to support the entire workflow involved in trading goods around the world - from accessing trade finance and managing the documents underpinning the shipping process, to having goods released from a port. Participants including importers, exporters, logistics service providers, and financial institutions will all benefit from improved efficiency and reduced cost. 

"The global logistics and shipping industry - like trade finance - is in critical need of digitisation," said Carl Wegner, CEO at Contour. "Counterparties need to be able to interact with trust, certainty and security - both in the way they finance trades and in the processes that support the physical shipment of goods. The problems that have beleaguered global trade for years are slowly becoming a thing of the past as adoption of innovative digital technologies picks up pace. We look forward to working with GSBN to further accelerate this industry-wide shift."

 

PNC pledges US$20bn in environmental finance

The PNC Financial Services Group has announced it is committing US$20bn billion over five years in support of environmental finance. This commitment is an extension of PNC's support for accelerating the transition to a low-carbon economy, and is complementary to the bank's recently announced Community Benefits Plan, which pledges US$88bn in loans, investments, and other financial support to bolster economic opportunity for low- and moderate-income (LMI) individuals and communities, people and communities of color, and other underserved individuals and communities.

The US$20bn environmental finance goal is comprised of the following pillars:

  • Green buildings - loans for buildings that meet third party-recognised standards or certifications, including LEED and ENERGY STAR.
  • Renewable energy - financing for renewable energy production and transmission, including wind, solar, geothermal and hydropower.
  • Clean transportation - financing for zero and low emissions vehicles, electric vehicle charging stations, and zero and low passenger or freight/rolling stock.
  • Environmental sustainability-linked bonds and loans which align to third-party frameworks such as the Green Bond Principles, and loans linked to environmental Key Performance Indicators (KPIs) or those with designated environmentally sustainable use of proceeds.

In 2020, PNC established a sustainable finance practice and its first head of Sustainable Finance, Kristi Eberhardt. The practice is focused on counselling clients through their own climate transition strategies, goals and approaches and offers support with sustainable debt issuances and sustainability-linked loans. The sustainable finance practice works across lines of business at PNC to assist with structuring loans and debt issuances that incorporate preferential pricing tied to the achievement of sustainability KPIs - both those with environmental benefits and social benefits. The sustainable finance practice was borne out of the issuance of PNC's inaugural green bond in late 2019 and it recently issued a social bond aimed at financing or re-financing eligible social projects that promote positive social outcomes and that benefit low- to moderate-income individuals and communities, majority-minority census tracts, and/or vulnerable or underserved populations.

This week, PNC released its first Task Force for Climate-related Financial Disclosures (TCFD) report which focuses on PNC's climate risk management strategy. TCFD provides a reporting framework containing recommendations over four categories - governance, strategy, risk management, and metrics and targets, to give investors informative and actionable information on how companies manage climate risk as the world transitions to a low-carbon economy. PNC formally endorsed the TCFD recommendations in 2019, and in 2020, began developing a plan to integrate the recommendations into business operations. This inaugural TCFD report is a first step in providing a more granular look at how PNC is incorporating a climate lens into day-to-day business strategy and risk management.

 

XDC Network is first blockchain company to join global Trade Finance Distribution Initiative

XinFin's XDC Network, a blockchain platform for global trade and finance, has been selected as the first blockchain company to join the global Trade Finance Distribution (TFD) Initiative, a consortium of trade originators, credit insurers, and institutional funders on a mission to boost automation and transparency in trade asset and risk distribution.

XDC Network was selected to join the TFD Initiative by fintech veteran André Casterman, whose track record includes over 20 years at SWIFT, leading various technology innovations in inter-bank payments, corporate payments, corporate treasury, and trade finance. Casterman is responsible for spearheading the TFD Initiative.

To establish trade as an investment class, TFD Initiative is working to define new technology- based market practices and transaction data specifications, with the goal of increasing the accessibility and transparency of trade flows. This will create a more robust trade finance ecosystem where banks can reach new types of funders, like institutional investors and family offices.

The TFD Initiative, whose members include global financial institutions and service providers such as ABN AMRO, Santander Asset Management, ING Bank, SMBC, ANZ, Commonwealth Bank of Australia, Texel Group, NN Investment Partners and more, recognises the vital role blockchain will play in shaping the future of the trade finance sector, which has already been successfully implemented in other areas of finance.

Using cryptographic tokens, the XDC Network allows for the digitisation, tokenisation, and swift settlement of trade transactions, reducing reliance on foreign exchange infrastructures. Some of the advantages include lower transaction fees (near zero), less energy consumption, efficient confirmation time, double validation, and randomisation for security guarantees. An initial set of SME-focused supply chain finance platforms powered by XDC on the back of the TFD Initiative will be announced in the coming weeks.

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