1. Home
  2. Environment, Social, Governance
  3. Environment

Industry roundup: 15 February

NatWest offers green loans under climate initiative

UK bank NatWest, which last October published its report A Springboard to Sustainable Recovery and pledged to provide £100 billion (US$135bn) of climate and sustainable funding and financing to customers by the end of 2025, is inviting applications for green loans from qualifying small and medium-sized enterprises (SMEs).

Green loans and green asset finance will be open for applications from 18 February, with no arrangement fee. NatWest says that the propositions aim to help qualifying SMEs finance the business assets to support their sustainability ambitions, such as solar panels, electric vehicles, or heat pumps on commercial buildings that fall within the eligible list developed by the bank on an ongoing basis.

Customers do not need to be existing NatWest customers to apply, and the green loan proposition will be available via the NatWest, Royal Bank of Scotland, and Ulster Bank NI brands, while the Green Asset Finance will be available through the Lombard brand. NatWest says the new propositions are designed to open up opportunities for sustainable growth options for qualifying SMEs and reflect the societal benefit of delivering climate action. To apply, qualifying SMEs will work directly with a NatWest or Lombard Relationship Manager to discuss their needs and check their eligibility.

According to last October’s report the UK’s six million SMEs could achieve 50% of the UK’s Net Zero decarbonisation goals worth an estimated £160bn revenue opportunity. However, it also found that less than 10% of SMEs currently see climate action as a source of future growth, and that SMEs lack access to support through funding, knowledge and training.

To accompany the green loan facility, NatWest is promoting its online Climate Hub. Through the Hub, eligible SMEs that invest in in clean buildings, energy, transport, and agriculture can access information on how to apply for green loans and green asset financing. The aim is to help combat climate change, by giving businesses the support needed to unlock sustainable projects and, ultimately, lower their emissions.

To overcome these barriers, the Hub pools resources, products and services that aim to address the gaps detected in NatWest’s report, and educate SMEs on the financial benefits of the net-zero transition.

Using the Hub, SMEs can access information on NatWest’s green loan and green asset financing solutions for SMEs; details on the bank’s accelerators, which connect SMEs with regional centres to help them identify business opportunities; as well as news on the pilot of NatWest’s carbon tracker app, due to launch February 2022, with 500 SMEs in the manufacturing and transport sectors.

Paul Thwaite, CEO of commercial banking, NatWest, comments: “Climate change is one of the biggest global challenges we face today, and SMEs have a critical role to play in helping the UK realise its green ambition. The reality is that while SMEs want to help by reducing emissions, they face many barriers doing so such as limited access to information, funding, and training.

“Our ambition is to stand by small businesses of the UK to help them reduce emissions and explore the opportunities that a move towards a green economy brings for us all. We cannot underestimate the power of small changes to make a big impact.”
 

Syngenta and HSBC use TradeLens for agrichemicals shipment

TradeLens, the digital platform launched in 2018 by IBM and the Danish shipping and logistics giant A.P.Moller-Maersk, announced the completion of an innovative letter of credit (LoC) between HSBC and agricultural group Syngenta using a digital bill of lading based on blockchain technology.

A Maersk release confirmed: “Agrichemical products were shipped from South Korea to Bangladesh using an entirely paperless process. The milestone demonstrates an important step in modernising trade finance and supply chain efficiency across the global trade ecosystem.”

During the shipment, all associated documentation was shared among the parties via the TradeLens platform including the electronic bill of lading directly from the ocean carrier Sealand – a Maersk company – the commercial invoice, certificates of origin and analysis and also the bank collection documents. Syngenta is estimated to have saved 10 days in document processing lead time.

“Trade between proximate markets is often encumbered by paperwork, leading to delays and higher costs," says Sanjay Tandon, regional head of product management, gobal trade and receivables finance, Asia Pacific, HSBC. "Removing paper from the process should not only increase the efficiency and velocity of trade but also enhance the appeal of the letter of credit as a trade finance solution by minimising documentary complexity.”

The benefits of electronic bills of lading (eBLs) are widely acknowledged but have yet to be widely used, according to the release. “Only 0.1% of original bills of lading are digitised today but with an end-to-end SaaS solution via TradeLens now available for finance transactions, original bills can move to paperless processes,” it noted.  

“The need to eliminate the physical hand-off of documentation has accelerated during the pandemic," says Michael White, CEO and Head, TradeLens. "At the same time, the drive to modernise infrastructure using digital-first technology has never been more critical. The TradeLens eBL for trade finance is the next step to make trade easier, providing paperless trade tools for clients who can realise immediate cost savings. We are excited to be working with HSBC and other banks to bring this solution to market.”


Saudi Arabia gives US$80 billion boost to state fund

Saudi Arabia has transferred shares totalling US$80 billion to its sovereign wealth fund as part of its policy to lessen its dependence on oil production and follow the lead of Norway and Singapore’s state-managed funds that support green initiatives.

Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto ruler, said 4% of shares in Saudi Aramco, the world’s biggest oil exporter, are being transferred to the kingdom’s sovereign wealth fund as part of efforts to recalibrate the oil-dominated economy. A rise in Aramco’s shares since the start of this year currently values the company at close to US$2 trillion.

Reports quoted the crown prince as saying the “transfer of 4% of Aramco shares to the Public Investment Fund (PIF) … is part of the kingdom’s long-term strategy to support the restructuring of its economy”. The state remains the largest shareholder after the transfer process, as it retains more than 94% of the company’s shares.

He added that the kingdom aims for the investment fund to have about 4 trillion riyals – just over US$1 trillion – in assets by the end of 2025. The fund had less than half that amount before this deal. The shares will bolster the PIF’s strong financial position and high credit ratings in the medium term, the crown prince said.

Commenting on the move Monica Malik, chief economist at Abu Dhabi Commercial Bank, said: “It supports the outlook for the PIF raising funds internationally, including bonds, and could potentially support a future Aramco share sale going forward.”

Saudi Aramco said in a statement the transfer was a private transaction between the government and the state fund. “The company is not a party to the transfer and did not enter into any agreements or pay or receive any proceeds from that transfer,” it confirmed. The move would not affect the number of issued shares nor the company’s operations, strategy, dividends distribution policy or governance framework.

 

EMQ augments South Asia real-time payments service

EMQ, the Hong Kong-based global payments network, says that it has significantly augmented its real-time cross-border payments across South Asia, including direct access to Nepal and India’s Immediate Payment Service (IMPS), with Unified Payments Interface (UPI) and additional markets in the pipeline.

EMQ added that the enhancements will provide a more transparent and cost-efficient payments solution for its customers worldwide, while enabling them to capture new opportunities across the emerging markets.

“At EMQ, we actively listen to our customers and these service enhancements reflect our continuous efforts to provide value-added solutions that meet their business needs. In the coming months, we will continue to expand our network with more global market touch points across the fastest growing economic corridors,” said Steven Liu, Global Head of Networks and Expansion, EMQ.

“Our enhanced coverage across Nepal and India further complement our efforts to offer differentiated value propositions with greater speed, agility and flexibility in both consumer and business payments that meet the evolving business models.”

Powered by its real-time payments network, EMQ says that the enhanced payment capabilities to Nepal and India are now available across all its global markets. With a single EMQ Connect API integration, customers can now send a maximum of rupees (INR) 500,000 (increased from INR 200,000) directly into local banks in real-time under the Immediate Payment Service (IMPS) and higher amounts via same-day fund transfers to India.

In Nepal, customers will also have direct access to real-time bank transfer of up to Nepalese rupees (NPR) 1,000,000 with additional same-day payment options available in the country. “These extended service offerings enable enterprises to focus on growing their business without the need to manage complex network infrastructure,” said EMQ.

In its release the company adds that it “continues to expand its product suite with real-time payments capabilities across Europe (Sepa Zone), Hong Kong, China, Thailand, Singapore, South Korea, India, Indonesia, Cambodia, Vietnam, Nepal, Philippines, the United Kingdom, and 19 markets in Africa, with expansion underway in the US, Canada and Latin America. The company is currently licensed in Hong Kong, Singapore, Indonesia and registered as a Money Service Business in Canada.”

 

Ecospend and Yoti partner on digital ID

Ecospend, the UK-based provider of open banking technology, has partnered with the digital identity network Yoti to integrate open banking services with its suite of identity solutions including the Yoti digital ID app.

Using Ecospend’s bank account verification technology, consumer identities will soon be verified on the Yoti app using their bank details, which will sit alongside traditional methods of verification such as using a passport, driving licence or birth certificate documents. Ecospend will also provide a ‘pay-by-bank’ service on the Yoti app to accompany traditional card payment solutions, to help minimise the risk of fraud with details no longer needing to be inputted by consumers. 

The partners add that the free Yoti app provides people with a secure digital identity on their phone, serving as a safe place to store personal details encrypted that can be shared online and in person with a tap of a button or scan of a QR code. Yoti also provides business customers with a safe way to verify customers in seconds, which can be integrated and white-labelled into business websites, apps, terminals or managed through custom platforms.

Yoti will add both open banking attributes and payment capabilities to enhance its suite of products for consumers, business and government clients. The partnership with Ecospend “marks a pivotal moment for the development of digital identities in the UK, with a growing ecosystem of consumers and businesses”.

James Hickman, Ecospend’s chief operating officer (COO), said that having started working with Her Majesty’s Revenue and Customs (HMRC) in 2021, the company was looking forward to further growing its UK presence with Yoti, and by extension the UK Post Office.

 

Crypto investment firm launches Zerocap Smart Beta Bitcoin

Australian specialist crypto investment management firm and platform Zerocap has developed and launched Zerocap Smart Beta Bitcoin, a new fund to enable investors to effectively manage and reduce the cryptocurrency’s high volatility and price swings.

The Melbourne-based firm said that managers will deploy proprietary models that rebalance the high volatility of Bitcoin to lower levels, in line with risk profiles of equity portfolios. “The objective of Smart Beta Bitcoin is to reduce and balance risk while actually improving risk adjusted returns, all while providing exposure to Bitcoin,” its release stated.

“Similar risk parity strategies are common and effectively deployed in other asset classes, and Zerocap believes this risk parity and risk reduction approach is well suited to Bitcoin, given its ingrained volatility and high-risk characteristics.”

Zerocap’s chief investment officer Jonathan de Wet said the Fund will deliver Bitcoin’s acknowledged benefits to investors – diversification and non-correlation to other asset classes, a hedge against inflation, and Bitcoin’s long-term record of value appreciation. 

“We want to deliver better, safer vehicles for digital asset investing. The number one concern of investors is Bitcoin’s high volatility and entry point, no matter when you enter it delivers an outsized portfolio impact.  Zerocap Smart Beta Bitcoin solves this problem by balancing timing risk while providing risk adjusted returns,” he said.

Zerocap’s head of trading, Toby Chapple said: “Having an asset class that trades at approximately seven times the swings of equity investments needs consideration before placing into a portfolio. Based on traditional investment banking techniques developed to cure hedge fund risk profiles.

“Smart Beta Bitcoin uses a proprietary and rigorous methodology to redistribute risk regularly between Bitcoin and a cash equivalent digital asset to accurately control the swings in the price of Bitcoin to a predetermined level. The product allows investors to control the downside risk of their investments whilst having all the statistical benefits that the asset class offers to a portfolio approach to investing.” 

Zerocap CEO Ryan McCall said, “Zerocap is committed to breaking down the barriers to entry for sophisticated investors to digital assets. Bitcoin’s price swings and overall falls in 2022 so far have once again highlighted its inherent volatility, making the availability of Zerocap’s Smart Beta strategy particularly appropriate.”

Like this item? Get our Weekly Update newsletter. Subscribe today

Also see

Add a comment

New comment submissions are moderated.