Societe Generale recognised for its Outstanding Innovations in Trade Finance

Each year, Global Finance magazine selects exceptional innovations in finance, honouring entities that regularly identify new paths and design new tools in finance. For the first time, one of Societe Generale’s key innovations has been rewarded: Green Trade Finance. All selections are made by the editorial board of the magazine with the input of reporters, who are experts on the functions being served by innovators.

Societe Generale is a pioneer in Green Trade Finance for its ability to offer and advise on green solutions in Europe, Middle East Asia and Africa. Early 2019, the Group’s approach consisted in setting up a working group with representatives of our Trade Finance business and our environmentalist experts who already developed and pioneered the Group’s offering on ESG solutions on capital and debt markets. The goal was to build a Green framework agreement including eligibility criteria for Green Trade Finance transactions.

This framework includes key principles / criteria set out by other standards (Green Loan principles from the LMA* / Green Bonds principles from ICMA**) as well as the EU Taxonomy. A Green Trade Finance transaction is therefore defined as a Trade Finance instrument, such as a guarantee or a letter of credit which secures, guarantees and/or finances an underlying project which has a clear positive contribution to the environment and which meets strict environmental guidelines. This project must take place in one of the four selected major industries, being: renewable energy, clean transport, waste management and water management, and must contribute to the advancement of the United Nations Sustainable Development Goals. Specific KPI’s are defined at project level and monitored during the whole life of the instrument.

The first Green Trade Finance contract guarantee of the kind was issued for Siemens Gamesa Renewable Energy, leading supplier of wind power solutions, with Societe Generale acting as Fronting and Issuing bank of a EUR 230 million Green Guarantee Facility. Since then, we have extended the geographical footprint of this offer since we have concluded additional Green Trade Finance transactions in other countries in Europe and Asia.