17 September 2019 – There is a growing understanding of the transformative potential of harnessing digital innovation and financial technologies to improve the sustainability of global supply chains. This report details the learnings and methodology of the collaborative project Trado, convened by the University of Cambridge Institute for Sustainability Leadership (CISL).
The Trado model enables a sustainability ‘data-for-benefits’ swap between a buyer and a supplier in the supply chain using banks’ traditional supply chain financing. This swap, provides parties in the supply chain with reliable data about the supply chain’s sustainability properties, helping to unlock finance to reward first mile producers such as smallholder farmers for information on sustainability.
The project trialled the model along a tea supply chain in Malawi where social or ecological data from suppliers was swapped for financial incentive. The report shows how increased transparency through data sharing along a tea supply chain led to earlier, pre-shipment financing with the potential for long-term benefits for a group of 225 tea farmer in that supply chain.
About
The University of Cambridge Institute for Sustainability Leadership (CISL) is the convenor of Project Trado and the consortium members are Barclays, BNP Paribas, Halotrade, IDH - the Sustainable Trade Initiative, Meridia, Provenance, Rabobank, Sainsbury’s, Sappi, Standard Chartered and Unilever. The report was partly funded by the Business Innovation Facility programme from the Department for International Development.
This report follows a report published by CISL’s Banking Environment Initiative in 2017: Catalysing fintech for sustainability: Lessons from multi-sector innovation, which presented recommendations on how to design collaboration between multinationals, financial institutions and start-ups in order to better harness fintech to help solve sustainability challenges in the real economy.
Citing this report
Please refer to this report as University of Cambridge Institute for Sustainability Leadership (CISL). (2019). Trado: New technologies to fund fairer, more transparent supply chains. Cambridge:University of Cambridge Institute for Sustainability Leadership.
