The role of trade in combating climate change has gained prominence, as highlighted by recent COP events. The “Trade Day” at COP28 in Dubai last December marked the first time the conference dedicated an entire day to trade, with governments, businesses, and international organisations discussing how trade policy could be leveraged to decarbonise global supply chains, incentivise businesses to invest in a net-zero future, and embed environmentally responsible practices into trade finance.
Corporates want to know that if they sign up for a sustainable facility, they will be able to prove its value in hard numbers to anyone who comes asking
In September, the upcoming COP29 further acknowledged the importance of trade with the announcement that the conference will include a dedicated space to explore how it can help address climate challenges. The launch of the COP29 Baku Initiative for Climate Finance, Investment, and Trade is a testament to this, as it integrates climate finance, investment, trade, and sustainable development agendas.
For banks, the key question is how to encourage and support companies to use sustainable trade finance instruments effectively.
Greenwashing often surfaces when talking about sustainability, as challenges in establishing credibility and trust abound.
