A pioneering solution to supply chain transparency
FAQ with Founder Shona Tatchell
Shona was Head of Trade Finance Innovation for Barclays Bank with over 25 years experience in global trade finance. In 2015, she conceived the idea for Halotrade. Shona’s vision was to transform the supply chain and create a financial incentive to have sustainable means of production and consumption.
“Suppliers, not usually incentivised to abide by the rules, suddenly have a financially significant reason to ensure regulations and best practice are adhered to in their own supply chains.”
Why do we need Halotrade?
As it stands, the supply chain for goods is opaque, inefficient and not aligned with global environmental and labor standards. This leads to a potential abuses and crimes – slavery, bribery, corruption and environmental destruction to name a few.
The current system puts the businesses and lives of individual suppliers at risk, as they are disengaged and disconnected from global markets. Companies don’t know what’s happening in their supply chains, which is risky and inefficient. They can’t reward or lock-in reliable sources because they don’t know who or where they are.
Halotrade creates a virtuous cycle, in which all actions from the farmer to the banker are trackable and transparent. The best practices are measured and rewarded, and finance is able to flow efficiently to the local workers and business owners who do the labor that makes the end product possible.
Why does Halotrade work?
Halotrade provides a reason to be ethical.
With the Halotrade system, corporate buyers can help their suppliers access funds at the advantageous rates of interest they themselves receive. Suppliers, not usually incentivised to abide by the rules, suddenly have a financially significant reason to ensure regulations and best practice are adhered to in their own supply chains.
Halotrade works with legacy and new, blockchain-based systems to execute code-enabled invoices that promptly release payment to the supplier once pre-determined criteria are satisfied.
Halotrade creates a sound financial incentive for every player to abide by industry standards set by organizations such as the International Labour Organisation, Better Work and the World Bank.
Who does Halotrade benefit?
The Halotrade system benefits everybody involved along the supply chain – from smallholding farmers to international banks and retailers.
- For banks, it provides a robust mechanism to derisk trade finance by gaining access to trustworthy data on the sustainability credentials of products for sale and those who produce them – stopping the funding of those supply chains that contain slavery or cause extreme environmental degradation.
- For brands and retailers it provides a transparent, traceable supply chain – including tracking impact over time and new data-backed product and brand marketing opportunities and regulatory and reputational risk reduction.
- Farmers are empowered with better data on their own land, including accurate land size as well as quicker access to cash at improved margins.
- Manufacturing businesses along the supply chain have quicker access to lower cost working capital, aligned with sustainability efforts and best practice, and by competing less on price, businesses with proven sustainability credentials will be able to secure longer lasting contracts.
Finally, for society as a whole it provides more sustainable production and consumption and more inclusive pricing, reflecting the true costs of production.
Why is transparency so important?
In order to better understand the impact and provenance of the products we consume, our supply chains must become more traceable and transparent.
Globally, the market for information required for sustainable and legally and regulatory compliant sourcing of commodities in value chains is either broken or non-existent, compounding any structural financial inequity within those same value chains. This is a major impediment to achieving several of the Sustainable Development Goals, as well as an impediment to opening up new sources of value for businesses.
How does Halotrade work?
Halotrade works on top of legacy and blockchain-based supply chain systems. We have integrated into blockchain systems, current ERP systems and, in some cases, built underlying architecture to support data quality.