{"id":53149,"date":"2021-11-10T09:59:36","date_gmt":"2021-11-10T09:59:36","guid":{"rendered":"https:\/\/www.tradefinanceglobal.com\/?page_id=53149"},"modified":"2025-02-05T13:55:22","modified_gmt":"2025-02-05T13:55:22","slug":"sustainability","status":"publish","type":"page","link":"https:\/\/www.tradefinanceglobal.com\/sustainability\/","title":{"rendered":"Sustainable Trade Finance"},"content":{"rendered":"\n<div class=\"wp-block-columns container w-auto is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:33.33%\"><div class=\"block-header-without-image d-flex flex-direction-column justify-content-center\">\n    <h2 class=\"fs-32 fw-700 fs-xs-28 not-for-table-content\" id=\"heading-sustainable-trade-finance\">\n        Sustainable Trade Finance    <\/h2>\n    <div class=\"d-grid grid-col-2 grid-col-xs-1\">\n                            <div class=\"\">\n                <div>Last updated on 05 Feb 2025<\/div>\n                <div>10 Nov 2021 . 1 min read<\/div>\n            <\/div>\n            <\/div>\n    <\/div><\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:66.66%\"><figure class=\"wp-block-post-featured-image\"><img loading=\"lazy\" decoding=\"async\" width=\"869\" height=\"352\" src=\"https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/Sustainable-Trade-Finance.jpg\" class=\"attachment-post-thumbnail size-post-thumbnail wp-post-image\" alt=\"\" style=\"object-fit:cover;\" srcset=\"https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/Sustainable-Trade-Finance.jpg 869w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/Sustainable-Trade-Finance-300x122.jpg 300w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/Sustainable-Trade-Finance-768x311.jpg 768w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/Sustainable-Trade-Finance-320x130.jpg 320w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/Sustainable-Trade-Finance-370x150.jpg 370w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/Sustainable-Trade-Finance-414x168.jpg 414w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/Sustainable-Trade-Finance-600x243.jpg 600w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/Sustainable-Trade-Finance-372x151.jpg 372w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/Sustainable-Trade-Finance-450x182.jpg 450w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/Sustainable-Trade-Finance-380x154.jpg 380w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/Sustainable-Trade-Finance-285x115.jpg 285w\" sizes=\"auto, (max-width: 869px) 100vw, 869px\" \/><\/figure><\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-columns container w-auto is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:33.33%\"><div class=\"bg-light-blue d-flex gap-16 h-auto p-16 rounded xs-flex-direction-column\">\n    <div class=\"\">\n    <img decoding=\"async\" style=\"min-width:100px;max-width: 150px\" src=\"https:\/\/secure.gravatar.com\/avatar\/c5c7f46c74d085beb1f2c4863fc91b31?s=160&#038;d=mm&#038;r=g\" class=\"w-100 rounded\">\n  <\/div>\n  <div class=\"col-span-2 col-span-xs-1\">\n    <div class=\"d-flex flex-direction-column gap-16 fs-16 justify-content-between\">\n      <div class=\"fs-16 fw-700\">Deepesh Patel<\/div>\n      <div class=\"fs-14 fw-400 elipsise-2-line\" title=\"Deepesh Patel is Editorial Director at Trade Finance Global (TFG) and host of Trade Finance Talks. Deepesh regularly chairs and speaks at international industry events held by the IFC, EBRD, IMN, WTO, Financial Times and Economist Impact, as well as industry associations including ICC, FCI, ITFA, ICISA and BAFT.\">\n        Deepesh Patel is Editorial Director at Trade Finance Global (TFG) and host of Trade Finance Talks. Deepesh regularly chairs and speaks at international industry events held by the IFC, EBRD, IMN, WTO, Financial Times and Economist Impact, as well as industry associations including ICC, FCI, ITFA, ICISA and BAFT.      <\/div>\n      <div>\n        <a class=\"text-black fs-12 small-link-arrow-right\" href=\"https:\/\/www.tradefinanceglobal.com\/posts\/?author=57\">\n          <span>\n            Latest Post          <\/span>\n        <\/a>\n      <\/div>\n    <\/div>\n  <\/div>\n<\/div>\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<figure class=\"wp-block-image size-full is-resized\"><img decoding=\"async\" src=\"https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/TFG-Sustainable-Trade-Finance-Hub-1.jpeg\" alt=\"\" class=\"wp-image-108867\" width=\"321\" srcset=\"https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/TFG-Sustainable-Trade-Finance-Hub-1.jpeg 600w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/TFG-Sustainable-Trade-Finance-Hub-1-300x300.jpeg 300w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/TFG-Sustainable-Trade-Finance-Hub-1-150x150.jpeg 150w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/TFG-Sustainable-Trade-Finance-Hub-1-320x320.jpeg 320w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/TFG-Sustainable-Trade-Finance-Hub-1-370x370.jpeg 370w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/TFG-Sustainable-Trade-Finance-Hub-1-414x414.jpeg 414w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/TFG-Sustainable-Trade-Finance-Hub-1-200x200.jpeg 200w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/TFG-Sustainable-Trade-Finance-Hub-1-250x250.jpeg 250w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/TFG-Sustainable-Trade-Finance-Hub-1-162x162.jpeg 162w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/TFG-Sustainable-Trade-Finance-Hub-1-159x159.jpeg 159w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/TFG-Sustainable-Trade-Finance-Hub-1-123x123.jpeg 123w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/TFG-Sustainable-Trade-Finance-Hub-1-190x190.jpeg 190w\" sizes=\"(max-width: 600px) 100vw, 600px\" \/><\/figure>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n<div style=\"min-height:100px!important;\" class=\"block-cta max-w-100 p-32 h-auto rounded sm-w-60 dark-mode bg-black align wp-block-acf-block-cta\">\n  <h4 id=\"heading-access-trade-receivables-and-supply-chain-finance\" class=\"fs-24 fw-700 elipsise-2-line dark:color-white not-for-table-content\">\n    Access trade, receivables and supply chain finance  <\/h4>\n  <p class=\"block-subtitle dark:color-white\">We assist companies to access trade and receivables finance through our relationships with 270+ banks, funds and alternative finance houses.<\/p>\n  <a href=\"https:\/\/www.tradefinanceglobal.com\/get-trade-finance\/\" class=\"dark:text-black px-16 py-8 rounded bg-black text-white fs-14 fw-700 dark:bg-tale\">\n    <span>Get Started<\/span>\n  <\/a>\n<\/div>\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-left\" id=\"h-our-partner\">Our Partner<\/h3>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img decoding=\"async\" src=\"https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/ITFA-LOGO-scaled-e1593707941720-1-1024x823.jpg\" alt=\"\" class=\"wp-image-108868\" width=\"321\" srcset=\"https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/ITFA-LOGO-scaled-e1593707941720-1-1024x823.jpg 1024w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/ITFA-LOGO-scaled-e1593707941720-1-300x241.jpg 300w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/ITFA-LOGO-scaled-e1593707941720-1-768x617.jpg 768w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/ITFA-LOGO-scaled-e1593707941720-1-320x257.jpg 320w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/ITFA-LOGO-scaled-e1593707941720-1-370x297.jpg 370w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/ITFA-LOGO-scaled-e1593707941720-1-414x333.jpg 414w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/ITFA-LOGO-scaled-e1593707941720-1-373x300.jpg 373w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/ITFA-LOGO-scaled-e1593707941720-1-249x200.jpg 249w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/ITFA-LOGO-scaled-e1593707941720-1-311x250.jpg 311w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/ITFA-LOGO-scaled-e1593707941720-1-202x162.jpg 202w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/ITFA-LOGO-scaled-e1593707941720-1-198x159.jpg 198w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/ITFA-LOGO-scaled-e1593707941720-1-153x123.jpg 153w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/ITFA-LOGO-scaled-e1593707941720-1-236x190.jpg 236w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2024\/05\/ITFA-LOGO-scaled-e1593707941720-1.jpg 1257w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n<div class=\"block-table-content h-auto bg-white auto\">\n    <ul class=\"table-content\"><\/ul><\/div><\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:66.66%\">\n<h2 class=\"wp-block-heading\" id=\"h-sustainable-trade-finance\">Sustainable Trade Finance<\/h2>\n\n\n\n<p><\/p>\n\n\n<div class=\"block-content align bg-tale rounded p-24 fs-16 h-auto wp-block-acf-block-content\"style=\"background-color: #FFFFFF;color: #002F4D;\"\n>\n    <p>Welcome to the TFG Sustainable Trade Finance Hub, a content centre for market insights on ESG, sustainability, climate change, and decarbonisation initiatives in relation to trade finance.<\/p>\n<p>International trade is an engine for economic growth and development, but it also accounts for some 80% of the world\u2019s carbon emissions.<\/p>\n<\/div>\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n<div class=\"block-content align bg-tale rounded p-24 fs-16 h-auto wp-block-acf-block-content\"style=\"background-color: #FFFFFF;color: #002F4D;\"\n>\n    <p>This hub aims to report on how companies are tackling the challenge of meeting the targets of the 2016 Paris Agreement and the 2020 Glasgow Agreement, which set a path for signatory countries to reduce greenhouse emissions.<\/p>\n<p>Additionally, the hub will offer information on how companies are aligning with the United Nations (UN) 2030 Sustainable Development Goals (SDGs), and how sustainability priorities are being integrated into global supply chains.<\/p>\n<p>Finally, a transition towards sustainable and inclusive trade will require standards and definitions, the latest of which you can also find here.<\/p>\n<\/div>\n\n\n<p><\/p>\n\n\n<div class=\"block-faq overflow-hidden h-auto py-10\">\n  <div class=\"container w-auto\">\n    <div class=\"d-grid grid-col-1 grid-col-xs-2 mb-24\">\n      <h3 id=\"heading-sustainable-trade-finance-frequently-asked-questions-faqs\" class=\"not-for-table-content fw-700 \">Sustainable trade finance \u2013 Frequently asked questions (FAQs)<\/h3>\n          <\/div>\n    <div class=\"d-grid grid-col-4 grid-col-xs-1 gap-24\">\n              <div class=\"d-flex overflow-x-auto hide-scrollbar xs-flex-direction-row flex-direction-column gap-24 list-question\">\n                      <div class=\"single-anwser active pointer bg-anti-flash-white border-radius-12 p-24\">\n              <h4 class=\"fs-20 mb-0 fw-700 elipsise-2-line detail-question not-for-table-content\" title=\"What is sustainable trade finance and what does it include?\">\n                What is sustainable trade finance and what does it include?              <\/h4>\n              <div class=\"detail-anwser d-hidden fs-16\"><p>In response to growing concerns over climate change and global warming, companies are increasingly looking at ways to minimise and mitigate their impact on the environment.<\/p>\n<p>Companies are now identifying environmental, social, or governance (ESG) risks associated with their business activities, such as the use of fossil fuels or other polluting goods and services within their supply chains.<\/p>\n<p>By better understanding those\u00a0<a href=\"https:\/\/www.tradefinanceglobal.com\/risk-insurance\/\" data-wpel-link=\"internal\">risks<\/a>\u00a0and their potential reputational, credit, and regulatory impacts, companies can play an active role in creating sustainable trade and encouraging sustainable practices, and can assist in the global implementation of sustainability policies and standards.<\/p>\n<p><b>Green loan<\/b><\/p>\n<p>As the name suggests, a green loan is a loan that is taken out to finance green projects.<\/p>\n<p>The term \u2018green loan\u2019 was first introduced in March 2018, when the UK-based Loan Market Association (LMA) and several other industry bodies published a report known as\u00a0<a href=\"https:\/\/www.lma.eu.com\/application\/files\/9115\/4452\/5458\/741_LM_Green_Loan_Principles_Booklet_V8.pdf\" rel=\"noopener\" data-wpel-link=\"external\">\u2018Green Loan Principles\u2019<\/a>.<\/p>\n<p>In the report, as green loan is defined as follows:\u00a0\u201cThe fundamental determinant of a green loan is the utilisation of the loan proceeds for Green Projects (including other related and supporting expenditures, including R&amp;D), which should be appropriately described in the finance documents and, if applicable, marketing materials.<\/p>\n<p>\u201cAll designated Green Projects should provide clear environmental benefits, which will be assessed, and where feasible, quantified, measured and reported by the borrower.\u201d<\/p>\n<p>As such, green projects could refer to those in sectors like renewable energy, waste reduction, and clean transportation, and can also cover related and supporting expenditures like research and development (R&amp;D).<\/p>\n<p>At present, one of the biggest challenges for the sustainable financing industry is its lack of common standards, and that\u2019s why the LMA and its partner organisations published the \u2018Green Loan Principles\u2019, which attempts to set out market standards and guidelines.<\/p>\n<p>Other industry bodies, such as the International Chamber of Commerce (ICC), are also currently in the process of introducing a draft framework of\u00a0<a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/breaking-new-icc-report-proposes-first-global-definitions-for-sustainable-trade-finance\/\" data-wpel-link=\"internal\">globally accepted standards and definitions for sustainable trade and trade finance<\/a>, which would also cover green loans.<\/p>\n<p>Within the trade finance industry, major banks are already issuing green loans, and their numbers continue to grow.<\/p>\n<p>This year, for example, UKEF announced a \u00a3430 million green loan \u2013\u00a0 first-ever government-backed green transition loan to engineering and consultancy firm Wood to seize new clean growth export opportunitiesfirst.<\/p>\n<p>&nbsp;<\/p>\n<p><b>Sustainability-linked loan<\/b><\/p>\n<p>In 2019, the LMA and several partner organisations published the\u00a0<a href=\"https:\/\/lma.eu.com\/application\/files\/8416\/2210\/4806\/Sustainability_Linked_Loan_Principles.pdf\" rel=\"noopener\" data-wpel-link=\"external\">\u2018Sustainability Linked Loans Principles\u2019<\/a>, as a follow-up to the \u2018Green Loan Principles\u2019 mentioned above.<\/p>\n<p>According to the 2019 report, sustainability-linked loans are defined as \u201cloan instruments and\/or contingent facilities (such as bonding lines, guarantee lines or letters of credit) which incentivise the borrower\u2019s achievement of predetermined sustainability performance objectives\u201d.<\/p>\n<p>In contrast to green loans, a sustainability-linked loan can be issued for non-green purposes, such as the financing of general business operations.<\/p>\n<p>Specifically, a sustainability-linked loan could link conditions such as the term or price of a loan to the borrower\u2019s performance against particular sustainability targets.<\/p>\n<p>As such, these targets are usually negotiated and agreed on by the borrower and the lender for each transaction.<\/p>\n<p>And finally, it should also be noted that a loan can be structured using both green loan and sustainability-linked loan principles simultaneously.<\/p>\n<p>&nbsp;<\/p>\n<p><b>Sustainable supply chain finance<\/b><\/p>\n<p>Sustainable supply chain finance refers to financial practices and techniques that incentivise sustainable behaviours among parties to a transaction.<\/p>\n<p>In practice, sustainable finance supply chain finance rewards suppliers for integrating ESG priorities into their supply chain.<\/p>\n<p>&nbsp;<\/p>\n<p><b>Sustainable shipment letter of credit (SSLC)<\/b><\/p>\n<p>A sustainable shipment letter of credit (SSLC) is a green financing product that was developed specifically for trade finance.<\/p>\n<p>It was first launched in 2014 by the International Finance Corporation (IFC) \u2013 which is part of World Bank Group \u2013 and the Banking the Banking Environment Initiative (BEI).<\/p>\n<p>The BEI is a group of global banks that aims to promote a more sustainable economic future.<\/p>\n<p>It was convened in 2010 by the Cambridge Institute for Sustainability Leadership in the UK, with the shared goal of expanding the global trade of sustainably-sourced\u00a0<a href=\"https:\/\/www.tradefinanceglobal.com\/commodity-trading\/\" data-wpel-link=\"internal\">commodities<\/a>.<\/p>\n<p>Like a regular letter of credit, an SSLC allows for discounted financing for trade transactions, but unlike a regular letter of credit, it is only issued based on specific sustainability criteria.<\/p>\n<p>To qualify for an SSLC, a supplier must provide evidence that their product meets internationally-recognised sustainability criteria, and that is usually done in the form of a sustainability stamp that is specific to the supplier\u2019s industry.<\/p>\n<p>For example, the first use of an SSLC was for a\u00a0<a href=\"https:\/\/www.tradefinanceglobal.com\/freight-forwarding\/\" data-wpel-link=\"internal\">shipping<\/a>\u00a0of palm oil backed by a Roundtable on Sustainable Palm Oil (RSPO) certificate, which guarantees that no forests or communities were harmed during the extraction of the oil.<\/p>\n<\/div>\n                          <\/div>\n                      <div class=\"single-anwser  pointer bg-anti-flash-white border-radius-12 p-24\">\n              <h4 class=\"fs-20 mb-0 fw-700 elipsise-2-line detail-question not-for-table-content\" title=\"What is green finance and why is it important?\">\n                What is green finance and why is it important?              <\/h4>\n              <div class=\"detail-anwser d-hidden fs-16\"><p>Green finance is a broad term that typically refers to financial investments that contribute to sustainable development and environmental initiatives. Learn more about green finance\u00a0<a href=\"https:\/\/www.tradefinanceglobal.com\/export-finance\/green-bonds-renewables\/\" data-wpel-link=\"internal\">here<\/a>.<\/p>\n<p>Green finance is important as it promotes and supports the flow of financial instruments and related services towards the development and implementation of sustainable business models, trade, and investments.<\/p>\n<p>More broadly, green finance facilitates the introduction of sustainable economic, environmental, and social policies.\u00a0This includes the advancement of policies oriented towards the\u00a0<a href=\"https:\/\/sdgs.un.org\/goals\" rel=\"noopener\" data-wpel-link=\"external\">United Nations (UN) 2030 Sustainable Development Goals (SDGs)<\/a>, which seek to shift the focus of commercial activity from shareholders\u2019 value creation (economic value) to stakeholders\u2019 value creation (economic, environmental, and social value<\/p>\n<\/div>\n                          <\/div>\n                      <div class=\"single-anwser  pointer bg-anti-flash-white border-radius-12 p-24\">\n              <h4 class=\"fs-20 mb-0 fw-700 elipsise-2-line detail-question not-for-table-content\" title=\"What are green finance products?\">\n                What are green finance products?              <\/h4>\n              <div class=\"detail-anwser d-hidden fs-16\"><p>Green finance encompasses all the initiatives taken by private and public agents (e.g. businesses, banks, governments, international organisations, etc.) to develop, promote, implement, and support projects with sustainable environmental impacts through financial instruments.<\/p>\n<p>Examples of green finance projects could include the promotion of renewable energies,\u00a0<a href=\"https:\/\/www.tradefinanceglobal.com\/commodity-trading\/etrm-software\/\" data-wpel-link=\"internal\">energy<\/a>\u00a0efficiency, water sanitation, and environmental audits.<\/p>\n<p>Green finance could also be used to reduce transportation and industrial pollution; to tackle climate change and deforestation; or to lower a company\u2019s own carbon footprint.<\/p>\n<\/div>\n                          <\/div>\n                      <div class=\"single-anwser  pointer bg-anti-flash-white border-radius-12 p-24\">\n              <h4 class=\"fs-20 mb-0 fw-700 elipsise-2-line detail-question not-for-table-content\" title=\"What is the difference between sustainable finance and green finance?\">\n                What is the difference between sustainable finance and green finance?              <\/h4>\n              <div class=\"detail-anwser d-hidden fs-16\"><p>The terms \u2018sustainability\u2019 and \u2018ESG\u2019 are often used interchangeably, including by business leaders and environmental campaigners.<\/p>\n<p>Sustainability and ESG are similar concepts, but in their current usage the main difference is that ESG often refers to specific metrics that can be quantified and measured, whereas sustainability does not.<\/p>\n<p>Sustainability is more of an umbrella term that encompasses a company\u2019s efforts to reduce the negative impacts of its business on the environment, such as by reducing or offsetting its carbon emissions.<\/p>\n<\/div>\n                          <\/div>\n                  <\/div>\n        <div class=\"col-span-3 col-span-xs-1 detail-anwser-block hide-scrollbar bg-tale rounded p-24\">\n          <h4 class=\"fs-20 fw-700 elipsise-2-line detail-question not-for-table-content\" title=\"What is the difference between sustainable finance and green finance?\">\n            What is sustainable trade finance and what does it include?          <\/h4>\n          <div class=\"detail-anwser fs-16\"><p>In response to growing concerns over climate change and global warming, companies are increasingly looking at ways to minimise and mitigate their impact on the environment.<\/p>\n<p>Companies are now identifying environmental, social, or governance (ESG) risks associated with their business activities, such as the use of fossil fuels or other polluting goods and services within their supply chains.<\/p>\n<p>By better understanding those\u00a0<a href=\"https:\/\/www.tradefinanceglobal.com\/risk-insurance\/\" data-wpel-link=\"internal\">risks<\/a>\u00a0and their potential reputational, credit, and regulatory impacts, companies can play an active role in creating sustainable trade and encouraging sustainable practices, and can assist in the global implementation of sustainability policies and standards.<\/p>\n<p><b>Green loan<\/b><\/p>\n<p>As the name suggests, a green loan is a loan that is taken out to finance green projects.<\/p>\n<p>The term \u2018green loan\u2019 was first introduced in March 2018, when the UK-based Loan Market Association (LMA) and several other industry bodies published a report known as\u00a0<a href=\"https:\/\/www.lma.eu.com\/application\/files\/9115\/4452\/5458\/741_LM_Green_Loan_Principles_Booklet_V8.pdf\" rel=\"noopener\" data-wpel-link=\"external\">\u2018Green Loan Principles\u2019<\/a>.<\/p>\n<p>In the report, as green loan is defined as follows:\u00a0\u201cThe fundamental determinant of a green loan is the utilisation of the loan proceeds for Green Projects (including other related and supporting expenditures, including R&amp;D), which should be appropriately described in the finance documents and, if applicable, marketing materials.<\/p>\n<p>\u201cAll designated Green Projects should provide clear environmental benefits, which will be assessed, and where feasible, quantified, measured and reported by the borrower.\u201d<\/p>\n<p>As such, green projects could refer to those in sectors like renewable energy, waste reduction, and clean transportation, and can also cover related and supporting expenditures like research and development (R&amp;D).<\/p>\n<p>At present, one of the biggest challenges for the sustainable financing industry is its lack of common standards, and that\u2019s why the LMA and its partner organisations published the \u2018Green Loan Principles\u2019, which attempts to set out market standards and guidelines.<\/p>\n<p>Other industry bodies, such as the International Chamber of Commerce (ICC), are also currently in the process of introducing a draft framework of\u00a0<a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/breaking-new-icc-report-proposes-first-global-definitions-for-sustainable-trade-finance\/\" data-wpel-link=\"internal\">globally accepted standards and definitions for sustainable trade and trade finance<\/a>, which would also cover green loans.<\/p>\n<p>Within the trade finance industry, major banks are already issuing green loans, and their numbers continue to grow.<\/p>\n<p>This year, for example, UKEF announced a \u00a3430 million green loan \u2013\u00a0 first-ever government-backed green transition loan to engineering and consultancy firm Wood to seize new clean growth export opportunitiesfirst.<\/p>\n<p>&nbsp;<\/p>\n<p><b>Sustainability-linked loan<\/b><\/p>\n<p>In 2019, the LMA and several partner organisations published the\u00a0<a href=\"https:\/\/lma.eu.com\/application\/files\/8416\/2210\/4806\/Sustainability_Linked_Loan_Principles.pdf\" rel=\"noopener\" data-wpel-link=\"external\">\u2018Sustainability Linked Loans Principles\u2019<\/a>, as a follow-up to the \u2018Green Loan Principles\u2019 mentioned above.<\/p>\n<p>According to the 2019 report, sustainability-linked loans are defined as \u201cloan instruments and\/or contingent facilities (such as bonding lines, guarantee lines or letters of credit) which incentivise the borrower\u2019s achievement of predetermined sustainability performance objectives\u201d.<\/p>\n<p>In contrast to green loans, a sustainability-linked loan can be issued for non-green purposes, such as the financing of general business operations.<\/p>\n<p>Specifically, a sustainability-linked loan could link conditions such as the term or price of a loan to the borrower\u2019s performance against particular sustainability targets.<\/p>\n<p>As such, these targets are usually negotiated and agreed on by the borrower and the lender for each transaction.<\/p>\n<p>And finally, it should also be noted that a loan can be structured using both green loan and sustainability-linked loan principles simultaneously.<\/p>\n<p>&nbsp;<\/p>\n<p><b>Sustainable supply chain finance<\/b><\/p>\n<p>Sustainable supply chain finance refers to financial practices and techniques that incentivise sustainable behaviours among parties to a transaction.<\/p>\n<p>In practice, sustainable finance supply chain finance rewards suppliers for integrating ESG priorities into their supply chain.<\/p>\n<p>&nbsp;<\/p>\n<p><b>Sustainable shipment letter of credit (SSLC)<\/b><\/p>\n<p>A sustainable shipment letter of credit (SSLC) is a green financing product that was developed specifically for trade finance.<\/p>\n<p>It was first launched in 2014 by the International Finance Corporation (IFC) \u2013 which is part of World Bank Group \u2013 and the Banking the Banking Environment Initiative (BEI).<\/p>\n<p>The BEI is a group of global banks that aims to promote a more sustainable economic future.<\/p>\n<p>It was convened in 2010 by the Cambridge Institute for Sustainability Leadership in the UK, with the shared goal of expanding the global trade of sustainably-sourced\u00a0<a href=\"https:\/\/www.tradefinanceglobal.com\/commodity-trading\/\" data-wpel-link=\"internal\">commodities<\/a>.<\/p>\n<p>Like a regular letter of credit, an SSLC allows for discounted financing for trade transactions, but unlike a regular letter of credit, it is only issued based on specific sustainability criteria.<\/p>\n<p>To qualify for an SSLC, a supplier must provide evidence that their product meets internationally-recognised sustainability criteria, and that is usually done in the form of a sustainability stamp that is specific to the supplier\u2019s industry.<\/p>\n<p>For example, the first use of an SSLC was for a\u00a0<a href=\"https:\/\/www.tradefinanceglobal.com\/freight-forwarding\/\" data-wpel-link=\"internal\">shipping<\/a>\u00a0of palm oil backed by a Roundtable on Sustainable Palm Oil (RSPO) certificate, which guarantees that no forests or communities were harmed during the extraction of the oil.<\/p>\n<\/div>\n          <a href=\"\" class=\"detail-link text-black fs-12 small-link-arrow-right text-right mr-0 d-hidden\">\n            <span><\/span>\n          <\/a>\n        <\/div>\n          <\/div>\n  <\/div>\n<\/div>\n\n\n<p><\/p>\n<\/div>\n<\/div>\n\n\n<div class=\"modules w-100 partners-sponsor container py-10\">\n  <div class=\"d-grid grid-col-8 grid-col-xs-1 grid-col-sm-4 gap-1 max-w-100 py-50\">\n    <div class=\"col-span-2 col-span-xs-1 col-span-sm-1\">\n      <div class=\"d-grid grid-col-1 grid-col-xs-1 mb-sm-15\">\n        <h4 id=\"heading-strategic-partners\" class=\"not-for-table-content fw-700 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class=\"fs-12 text-capitalize mt-16 meta-category\">\n                                  <a class=\"articles\" href=\"https:\/\/www.tradefinanceglobal.com\/posts\/category\/articles\/\">\n                    Articles                  <\/a>\n                  <span>Trade Finance<\/span>\n                              <\/div>\n\n              <div class='py-12 d-block'>\n                <a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/trade-finance-distribution-unlocking-liquidity-in-a-fast-growing-sector\/\" rel=\"bookmark\" class='fs-20 fw-700 text-black elipsise-2-line dark:color-white'>\n                  Trade finance distribution: Unlocking liquidity in a fast-growing sector                <\/a>\n              <\/div>\n              <div>\n                <a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/author\/dimitrios-ntalianis\/\" class='fs-14 text-black dark:color-white fw-700'>\n                  Dimitrios Ntalianis                <\/a>\n              <\/div>\n              <div class=\"dark:color-white fs-14\">\n                16 Apr 2025 . 4 min read              <\/div>\n            <\/div>\n          <\/div>\n                  <div class=\"swiper-slide\">\n            <div class=\"p-24 rounded bg-light-blue dark:bg-maastricht-blue my-20\">\n              <a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/5-takeaways-from-finastra-europe-corporate-banking-day-ai-digitisation-and-a-changing-industry\/\" rel=\"bookmark\" class='d-flex max-w-100 justify-content-center align-items-center overflow-hidden' style=\"max-height: 90px\">\n                <img loading='lazy' alt='5 takeaways from Finastra Europe Corporate Banking Day AI, digitisation, and a changing industry' style=''  width='100%' height='auto' src='https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/04\/5-takeaways-from-Finastra-Europe-Corporate-Banking-Day-AI-digitisation-and-a-changing-industry-1-150x150.jpg' srcset='https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/04\/5-takeaways-from-Finastra-Europe-Corporate-Banking-Day-AI-digitisation-and-a-changing-industry-1-300x128.jpg 300w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/04\/5-takeaways-from-Finastra-Europe-Corporate-Banking-Day-AI-digitisation-and-a-changing-industry-1-1024x438.jpg 1024w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/04\/5-takeaways-from-Finastra-Europe-Corporate-Banking-Day-AI-digitisation-and-a-changing-industry-1-768x328.jpg 768w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/04\/5-takeaways-from-Finastra-Europe-Corporate-Banking-Day-AI-digitisation-and-a-changing-industry-1-700x300.jpg 700w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/04\/5-takeaways-from-Finastra-Europe-Corporate-Banking-Day-AI-digitisation-and-a-changing-industry-1-320x137.jpg 320w, 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https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/04\/5-takeaways-from-Finastra-Europe-Corporate-Banking-Day-AI-digitisation-and-a-changing-industry-1-380x162.jpg 380w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/04\/5-takeaways-from-Finastra-Europe-Corporate-Banking-Day-AI-digitisation-and-a-changing-industry-1-285x122.jpg 285w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/04\/5-takeaways-from-Finastra-Europe-Corporate-Banking-Day-AI-digitisation-and-a-changing-industry-1.jpg 1230w' \/>              <\/a>\n              <div class=\"fs-12 text-capitalize mt-16 meta-category\">\n                                  <a class=\"articles\" href=\"https:\/\/www.tradefinanceglobal.com\/posts\/category\/articles\/\">\n                    Articles                  <\/a>\n                  <span>Trade Finance<\/span>\n                              <\/div>\n\n              <div class='py-12 d-block'>\n                <a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/5-takeaways-from-finastra-europe-corporate-banking-day-ai-digitisation-and-a-changing-industry\/\" rel=\"bookmark\" class='fs-20 fw-700 text-black elipsise-2-line dark:color-white'>\n                  5 takeaways from Finastra Europe Corporate Banking Day: AI, digitisation, and a changing industry                <\/a>\n              <\/div>\n              <div>\n                <a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/author\/silvia-andreoletti\/\" class='fs-14 text-black dark:color-white fw-700'>\n                  Silvia Andreoletti                <\/a>\n              <\/div>\n              <div class=\"dark:color-white fs-14\">\n                11 Apr 2025 . 2 min read              <\/div>\n            <\/div>\n          <\/div>\n                  <div class=\"swiper-slide\">\n            <div class=\"p-24 rounded bg-anti-flash-white-2 dark:bg-maastricht-blue my-20\">\n              <a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/markets-react-to-liberation-day-tariffs-as-global-trade-hangs-in-the-balance\/\" rel=\"bookmark\" class='d-flex max-w-100 justify-content-center align-items-center overflow-hidden' style=\"max-height: 90px\">\n                <img loading='lazy' alt='Markets react to Liberation Day tariffs as global trade hangs in the balance' style=''  width='100%' height='auto' src='https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/04\/Markets-react-to-Liberation-Day-tariffs-as-global-trade-hangs-in-the-balance-150x150.jpg' srcset='https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/04\/Markets-react-to-Liberation-Day-tariffs-as-global-trade-hangs-in-the-balance-300x128.jpg 300w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/04\/Markets-react-to-Liberation-Day-tariffs-as-global-trade-hangs-in-the-balance-1024x438.jpg 1024w, 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href=\"https:\/\/www.tradefinanceglobal.com\/posts\/category\/news\/\">\n                    News                  <\/a>\n                  <span>Supply Chain Finance<\/span>\n                              <\/div>\n\n              <div class='py-12 d-block'>\n                <a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/markets-react-to-liberation-day-tariffs-as-global-trade-hangs-in-the-balance\/\" rel=\"bookmark\" class='fs-20 fw-700 text-black elipsise-2-line dark:color-white'>\n                  Markets react to Liberation Day tariffs as global trade hangs in the balance                <\/a>\n              <\/div>\n              <div>\n                <a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/author\/silvia-andreoletti\/\" class='fs-14 text-black dark:color-white fw-700'>\n                  Silvia Andreoletti                <\/a>\n              <\/div>\n              <div class=\"dark:color-white fs-14\">\n                07 Apr 2025 . 3 min read              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href=\"https:\/\/www.tradefinanceglobal.com\/posts\/tfg-tariff-tracker-whats-in-store-for-liberation-day\/\" rel=\"bookmark\" class='fs-20 fw-700 text-black elipsise-2-line dark:color-white'>\n                  TFG Tariff Tracker: What\u2019s in store for Liberation Day?                <\/a>\n              <\/div>\n              <div>\n                <a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/author\/silvia-andreoletti\/\" class='fs-14 text-black dark:color-white fw-700'>\n                  Silvia Andreoletti                <\/a>\n              <\/div>\n              <div class=\"dark:color-white fs-14\">\n                02 Apr 2025 . 3 min read              <\/div>\n            <\/div>\n          <\/div>\n                  <div class=\"swiper-slide\">\n            <div class=\"p-24 rounded bg-anti-flash-white dark:bg-maastricht-blue my-20\">\n              <a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/sanctions-in-practice-how-the-trade-industry-is-adapting-to-global-restrictions\/\" rel=\"bookmark\" class='d-flex max-w-100 justify-content-center align-items-center overflow-hidden' style=\"max-height: 90px\">\n                <img loading='lazy' alt='Sanctions in practice How the trade industry is adapting to global restrictions' style=''  width='100%' height='auto' src='https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/03\/Sanctions-in-practice-How-the-trade-industry-is-adapting-to-global-restrictions-150x150.jpg' srcset='https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/03\/Sanctions-in-practice-How-the-trade-industry-is-adapting-to-global-restrictions-300x128.jpg 300w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/03\/Sanctions-in-practice-How-the-trade-industry-is-adapting-to-global-restrictions-1024x438.jpg 1024w, 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600w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/03\/Sanctions-in-practice-How-the-trade-industry-is-adapting-to-global-restrictions-372x159.jpg 372w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/03\/Sanctions-in-practice-How-the-trade-industry-is-adapting-to-global-restrictions-450x192.jpg 450w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/03\/Sanctions-in-practice-How-the-trade-industry-is-adapting-to-global-restrictions-380x162.jpg 380w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/03\/Sanctions-in-practice-How-the-trade-industry-is-adapting-to-global-restrictions-285x122.jpg 285w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/03\/Sanctions-in-practice-How-the-trade-industry-is-adapting-to-global-restrictions.jpg 1230w' \/>              <\/a>\n              <div class=\"fs-12 text-capitalize mt-16 meta-category\">\n                                  <a class=\"articles\" href=\"https:\/\/www.tradefinanceglobal.com\/posts\/category\/articles\/\">\n                    Articles                  <\/a>\n                  <span>Trade Law<\/span>\n                              <\/div>\n\n              <div class='py-12 d-block'>\n                <a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/sanctions-in-practice-how-the-trade-industry-is-adapting-to-global-restrictions\/\" rel=\"bookmark\" class='fs-20 fw-700 text-black elipsise-2-line dark:color-white'>\n                  Sanctions in practice: How the trade industry is adapting to global restrictions                <\/a>\n              <\/div>\n              <div>\n                <a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/author\/silvia-andreoletti\/\" class='fs-14 text-black dark:color-white fw-700'>\n                  Silvia Andreoletti                <\/a>\n              <\/div>\n              <div class=\"dark:color-white fs-14\">\n                24 Mar 2025 . 4 min read           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class=\"podcasts\" href=\"https:\/\/www.tradefinanceglobal.com\/posts\/category\/podcasts\/\">\n                    Podcasts                  <\/a>\n                  <span>Risk and Insurance<\/span>\n                              <\/div>\n\n              <div class='py-12 d-block'>\n                <a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/podcast-thriving-amidst-turbulence-the-role-of-bespoke-insurance\/\" rel=\"bookmark\" class='fs-20 fw-700 text-black elipsise-2-line dark:color-white'>\n                  PODCAST | Thriving amidst turbulence: The role of bespoke insurance                <\/a>\n              <\/div>\n              <div>\n                <a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/author\/sanda-blanco\/\" class='fs-14 text-black dark:color-white fw-700'>\n                  Sanda Blanco Gonz\u00e1lez                <\/a>\n              <\/div>\n              <div class=\"dark:color-white fs-14\">\n                24 Mar 2025 . 4 min read         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href=\"https:\/\/www.tradefinanceglobal.com\/posts\/back-to-basics-the-role-of-embedded-payments\/\" rel=\"bookmark\" class='fs-20 fw-700 text-black elipsise-2-line dark:color-white'>\n                  Back to basics: The role of embedded payments                <\/a>\n              <\/div>\n              <div>\n                <a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/author\/marija-nakevska\/\" class='fs-14 text-black dark:color-white fw-700'>\n                  Marija Nakevska                <\/a>\n              <\/div>\n              <div class=\"dark:color-white fs-14\">\n                19 Mar 2025 . 2 min read              <\/div>\n            <\/div>\n          <\/div>\n                  <div class=\"swiper-slide\">\n            <div class=\"p-24 rounded bg-anti-flash-white-2 dark:bg-maastricht-blue my-20\">\n              <a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/video-the-role-of-women-in-africas-trade-and-finance\/\" rel=\"bookmark\" class='d-flex max-w-100 justify-content-center align-items-center overflow-hidden' style=\"max-height: 90px\">\n                <img loading='lazy' alt='gwen mwaba afreximbank featured' style=''  width='100%' height='auto' src='https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/03\/gwen-mwaba-afreximbank-featured-150x150.jpg' srcset='https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/03\/gwen-mwaba-afreximbank-featured-300x128.jpg 300w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/03\/gwen-mwaba-afreximbank-featured-1024x438.jpg 1024w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/03\/gwen-mwaba-afreximbank-featured-768x328.jpg 768w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/03\/gwen-mwaba-afreximbank-featured-700x300.jpg 700w, https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2025\/03\/gwen-mwaba-afreximbank-featured-320x137.jpg 320w, 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class=\"fs-12 text-capitalize mt-16 meta-category\">\n                                  <a class=\"videos\" href=\"https:\/\/www.tradefinanceglobal.com\/posts\/category\/videos\/\">\n                    Videos                  <\/a>\n                  <span>Trade Finance<\/span>\n                              <\/div>\n\n              <div class='py-12 d-block'>\n                <a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/video-the-role-of-women-in-africas-trade-and-finance\/\" rel=\"bookmark\" class='fs-20 fw-700 text-black elipsise-2-line dark:color-white'>\n                  VIDEO | The role of women in Africa\u2019s trade and finance                <\/a>\n              <\/div>\n              <div>\n                <a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/author\/gwen-mwaba\/\" class='fs-14 text-black dark:color-white fw-700'>\n                  Gwen Mwaba                <\/a>\n              <\/div>\n              <div class=\"dark:color-white fs-14\">\n                19 Mar 2025 . 2 min read              <\/div>\n            <\/div>\n          <\/div>\n              <\/div>\n      <div class=\"swiper-control d-hidden \">\n        <div class=\"swiper-buttons\">\n          <div class=\"swiper-button-prev\"><\/div>\n          <div class=\"swiper-button-next\"><\/div>\n        <\/div>\n        <div class=\"swiper-scrollbar\"><\/div>\n      <\/div>\n    <\/div>\n  <\/div>\n<\/div>\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Our Partner Sustainable Trade Finance<\/p>\n","protected":false},"author":57,"featured_media":110635,"parent":0,"menu_order":3,"comment_status":"closed","ping_status":"open","template":"","meta":{"_acf_changed":false,"content-type":"","ep_exclude_from_search":false,"footnotes":""},"categories":[],"class_list":["post-53149","page","type-page","status-publish","has-post-thumbnail","hentry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.7 (Yoast SEO 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