HSBC and Guan Chong Bhd, launch the first Green financing for sustainable cocoa supply chain in Malaysia.
HSBC in Malaysia stated this is the first green financing they had completed, and they were delighted to be in collaboration with Guan Chong Bhd. Based out of Johor, Guan Chong is one of the worlds largest cocoa grinders.
Green financing as it’s known is money raised for projects that can show a level of environmental credentials. This kind of finance is especially popular at the moment, with billions of dollars being regularly funnelled into projects, some of which it must be said will probably be of dubious environmental value
In this case, the company used a well-known certification organisation to verify that the cocoa beans are free from slavery, and met the other requirements to qualify for the financing. This isn’t just a first for HSBC in Malaysia, but also for Guan Chong. The company stated they had ambitions To make 100 per cent of the cocoa source traceable by 2030.
The certification bodies use trade documents in order to determine the veracity of the environmental claims. further information about what checks were needed to satisfy the qualifications were not published in the press release.
Unfortunately, the bar for achieving some of these certifications is quite low. Although in this case, Guan Chong has taken additional steps toward embracing a wider sustainability footprint. Last year they joined the Cocoa & Forests Initiative, a programme set up in 2017 by a number of credible partners to fight deforestation in the cocoa sector.
As new technology becomes available, leveraging non-reputable systems like blockchain, combined with more scrutiny on certification schemes, we can hope to close the gap between the sustainability levels claimed and the reality on the ground.