WAIFC Report on “Enhancing Supply Chain Finance for the promotion of the Green Transformation”
The paper resulted from discussions between members spanning a few years and exploring supply chains and impacts on them after the pandemic. Coordinated by FinCity.Tokyo and Frankfurt Main Finance and with contributions from Abu Dhabi Global Market (ADGM), Casablanca Finance City, Dubai International Financial Centre (DIFC), EnterpriseNGR, FinanceMalta, and Paris EUROPLACE, the paper discusses the role that finance can play in supporting global supply chains to meet the challenges of today.
Global supply chains have grown rapidly over the years of globalization but have started to take on new roles in evolving economic and financial situations. In particular, the implementation of the transition strategy to achieve net zero greenhouse gas (GHG) emission targets through supply chains is becoming an important challenge. WAIFC members discussed the roles of financial markets and measures in mitigating the associated risks. They have also explored various approaches so that such measures can be adapted flexibly to align with the conditions across different economies.
Another important theme discussed is digitalization and its role in the growth strategies of many economies. Among all of these, the digitalization of financial services plays a special role in helping to achieve sustainable economic growth. At the same time, efforts are being made to digitize Supply Chain Finance by new financial players, such as FinTech companies and trading companies, and existing providers of financial services, such as banks and investment banks.
The paper further examines common features and challenges faced by the economies of WAIFC members presenting a range of options for empowering the financial market, as well as financial measures that can be employed in different situations.
The paper explores the following questions:
- What are the conditions for realizing the Green Transformation through supply chains?
- What are the advantages of Supply Chain Finance for the Green Transformation?
- How should we produce and utilize digital information in supply chains?
- What are effective policy measures for improving supply chain finance?
Commenting on the publication, Keiichi Aritomo, the Chairman of WAIFC, stated:
“The role of WAIFC is unique, where both developing and emerging economies, Eastern and Western, are able to collaborate harmoniously with one another. It is important that WAIFC continues to ensure that financial centers are working together to provide sufficient funding and knowledge transfer especially when it comes to the green transformation of end-to-end supply chains. Given the macro-economic transformations we have seen in the past 5 years, we have seen the impact on the supply chains of many goods and resources. We looked for solutions, but soon, we realized that there would be no silver bullet. Rather, we have to continuously explore opportunities and exchange ideas in order to achieve common goals among very different financial centers. The outcomes of the exchanges and discourse led us to publish this paper. With much gratitude to our members who shared their experiences, case examples, and lessons learned in developing this paper”
Hubertus Väth, Managing Director, Frankfurt Main Finance, stated:
"Transformation to sustainability and resilience of economies in adverse conditions are the two main challenges of our decade. And they are not without conflicts. Financial centers and their institutions can contribute to solving the conundrum and help states and corporations solve the conflicts and overcome the hurdles. As the challenge is global, solutions are. WAIFC is a unique platform to achieve just that, and we are grateful for this opportunity."
You can download the whitepaper here.
The World Alliance of International Financial Centers (WAIFC) is a non-profit association registered in Brussels, Belgium, which represents 30 leading international financial centers and facilitates cooperation and the exchange of best practices. WAIFC members are city governments, associations, and similar institutions developing and promoting their financial centers.
WAIFC facilitates cooperation between its members, the exchange of best practices, and communication with the general public.