Global trade and ESG

Driving sustainable trading practices across the world.

Due to supply chain demands, most businesses involved in trade appreciate the importance of embarking on the ESG journey. But this can’t be undertaken alone. To drive responsible and sustainable change, we need to bring together all components of the ecosystem and work collaboratively.

James Binns

Global Head of Trade & Working Capital at Barclays

Greater collaboration is key

To make world trade much more sustainable, it’s clear that all stakeholders need to come together to think about what and how needs to be measured and what is achievable in the years to come. The statistics below show the scale of challenge.

£7 billion in UK Export Finance support for sustainable projects since 2019 - Ref. 1

80% of the value of world trade is unsustainable when matched against the United Nations’s Sustainable Development Goals - Ref. 1

1/3 of UK Export Finance support for energy since 2020 went to renewable projects - Ref. 1

Standardisation and interoperability are key to this – enabling alignment around common ESG frameworks and standards. In the same way that the United Nations’ Model Law on Electronic Transferable Records (MLETR) makes documentation more transferable across different platforms and jurisdictions, common sustainability and ESG trade standards need to be adopted across different geographies.

Similarly, greater standardisation of application programming interfaces (APIs) is required to enable digital trade systems to communicate effectively and share data.

Putting it into practice

Trade organisations, such as UK Export Finance (UKEF) and the Association of British Ports (ABP), are already playing an important role in facilitating a greater focus on ESG across international trade.

UKEF

No longer supports overseas fossil fuel activity

Focused on building capacity for renewables and transitions projects – providing over £7bn of support to sustainable projects around the world

Developing its network of international export finance executives, including in emerging economies, to help identify new opportunities for UK exports.

ABP

Launched ‘Ready for Tomorrow’ sustainability strategy in early 2023, aiming to achieve net-zero emissions by 2040

Using data to help customers reduce their supply chain emissions

Increasing focus on port infrastructure required for electric vessels, along with alternative fuels such as methanol, green ammonia and hydrogen.

Driving sustainability through tech

Aside from reducing the cost of cross-border trade, increasing use of technology and digital solutions can help address climate and environmental challenges and make trade more inclusive. For example:

Eliminating paper

Favour digital processes to significantly reduce a supply chain’s impact on the environment.

Better data

To promote transparency and improve carbon emissions tracking.

Sustainability compliance

Help to evaluate supply chains and support businesses in their transition efforts.

Reducing cross-border trade barriers

By moving economic activity into the virtual space and enabling more businesses to access the international trading system to make global trade more inclusive.

James Binns wishes to thank additional contributors:

Tim Reid, CEO, UK Export Finance
Julian Walker, Chief Commercial Officer, Associated British Ports

¹https://www.gov.uk/government/news/ukef-provides-36-billion-for-sustainable-projects-in-2021^

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