Barclays, BNP Paribas and Standard Chartered are working with thousands of tea farmers that supply Unilever and supermarket Sainsbury's on the year-long project.

The pilot, which has secured more than £600,000 in private and public funding, aims to give banks and companies more detailed and reliable information about the environmental and social standards achieved in the supply chain, rewarding sustainability with cheaper working capital.

Technology from four fintech startups will be tested, including a blockchain-based supply chain offering from Provenance and a system developed by Halotrade that uses smart contracts and algorithms to convert supply chain data into preferential pricing terms in banks’ systems. Meanwhile, Landmapp will provide land rights documentation via mobile technology and Focafet Foundation will ensure open-source data standards are developed and used throughout.

The technology works by gathering and recording standardised information from farmers about their produce, including production quality and price, using virtual identifiers that are encoded on a blockchain. This makes second and third tier supplier information available to all parties that can access that blockchain, making the supply - and its sustainability information - traceable and transparent.

Marguerite Burghardt, head, trade finance competence center, BNP Paribas, says: "This technology has the real potential to help banks access more detailed and more reliable information about social and environmental impacts in a secure way, throughout the entire supply chain.

"This will enable financial institutions to broaden the scope of their financing offers and to propose financial incentives to their customer clients, based on their environmental and social standards."

The banks could also benefit from better oversight of transactions, helping with compliance with regulations such as the Modern Slavery Act and Bribery Act. This in turn would attract investors and clients concerned with sustainability impacts, say the partners.