The global push towards the adoption of greater environmental, social and governance (ESG) practices presents unique challenges for commodity producers, which will need to innovate and rebuild their growth agenda in order to keep pace. The structured commodity finance Emea team at Crédit Agricole CIB outlines the role of banks in developing sustainability-linked transactions to help drive this change.
When it comes to structuring a sustainability-linked commodities transaction, much depends on the particular commodity in question. “There is no holistic approach; it is really sector specific,” says Sauty de Chalon, director, structured commodity finance, Emea at Crédit Agricole CIB. An important factor to take into account when structuring a sustainability-linked transaction is whether the key performance indicators (KPIs) being set are sufficiently relevant or robust to justify the sustainability label. This is where banks’ expertise can come to the fore to help clients explore the ESG issues that are applicable in their own industry and the evolution of the regulatory approvals that are needed throughout the world.