Trade Finance Global (TFG) spoke to the global head of trade for Trade and Treasury Solutions (TTS) at Sibos 2022, discussing what Citi is doing to incorporate sustainability goals into their trade finance business.
Citi has been working collaboratively with its institutional clients to incorporate more sustainability-based principles into their everyday operations; a movement taking place as the world increasingly moves towards a more sustainable, low-carbon economy.
In 2021, Citi announced its $1 trillion commitment to sustainable finance by 2030 and to net zero emissions by 2050.
But how does one of the world’s largest banks do this across 96 markets and in all sectors, especially given current trading conditions?
TFG spoke to Christopher Cox, head of global trade and institutional finance division, TTS, at Citi, to find out.
Cox said, “Environment, social, governance (ESG) is part of what we’re going to do as an organisation to help our clients transition to a cleaner future, that also applies in trade.”
This has been achieved through the launch of various supply chain finance programmes, where Citi is actively ESG-screening suppliers and working with supply chains to push through stronger social principles.
Cox added, “We’re putting the frameworks and technologies in place to do that, working with organisations like the ICC on those principles.”
This, of course, is no small feat, given Citi’s global financial infrastructure, with trading floors in almost 80 markets, clearing and custody networks in 63 markets, and connections with 400 clearing systems. In total, it has been estimated that Citi processes an average of $4 trillion in flows daily.
Despite the wider pandemic-related challenges of 2020 and 2021, Citi remains committed to supporting its commercial and trade clients––financially and operationally––helping them to grow through access to greener, more frictionless finance.
This has meant developing digital solutions like the CapaCiTi platform that allows clients to request and manage loans electronically via Citi’s Electronic Trade Loans capability.
Cox said, “We’ve seen tremendous take up of the product. It’s live in 72 countries offshore and in 14 countries onshore. It’s growing at a double-digit rate, and it’s all about making the convenience of e-loans for clients as straightforward as possible.”
In terms of servicing their 5000-plus global multinational corporates––particularly those in emerging markets like Brazil, India, and China––TTS partner with correspondent banks, who, in turn, partner with local corporates. This chain creates a finance network that reaches the supply chain level.
Citi also works with agencies such as the European Bank for Reconstruction and Development (EBRD) to create greater access to liquidity and trade loans for smaller trading outfits in developing countries.
At every level, Citi aims to offer support in making every part of the supply chain greener and more sustainable, despite current challenges and global uncertainty.
Cox said, “Look, it’s been a remarkable 36 months. It’s nice that we’re here at Sibos, and we’re actually seeing some signs of social liberation, as it were, and that people are very much wanting to do business.
“But we remain focused on supporting our clients through what are undeniably very challenging times.”