Trade of goods and services is a key component of our economic activities and International Trade currently represents 25% of global GDP (Gross Domestic Product). The production and transport of these goods and services has a significant impact on the environment and contributes to the triple planetary crisis. In order to promote and incorporate best practices in the production and sale of these goods and services and promote sustainable trade, Trade Regulations could be a critical tool to do so and avert the crisis.
International trade is highly dependent on Trade Finance. 80% to 90% of trade operations rely on the extension of a financial instrument to manage a payment, secure this payment, or offer a financing. Financial institutions usually involved in Trade Finance (including banks, insurers, and other entities) could be critical actors in the promotion of Sustainable Trade through Sustainable Trade and Export Finance. Banks active in Export Finance and official Export Credit Agencies (ECAs) have integrated sustainable practices in their activities for more than 20 years, being precursors in their environmental and social considerations with a focus on limiting damages. Nowadays, the need for a pro-active attitude to support projects with positive impacts expands. While a large number of standards and principles exist, leading to fragmentation in many cases. UNEP Finance Initiative is actively working encouraging the global harmonization of standards and generating high-quality benchmarks of performance in its principles and alliances such as the Principles for Responsible Banking (PRB).
Trade Finance is critical in the management of trade flows for corporates. The need for simple and largely shared principles by all stakeholders in Trade Finance might be a very efficient tool to promote Sustainable Trade and Sustainable Trade Finance. UNEP is currently working on scoping ways to support Sustainable Trade and Export Finance and further collaboration with partners and beneficiaries.
