The need to embed sustainability into supply chains and avoid harm to the environment and human welfare has never been more acute. Though no individual or institution can ignore sustainability, it is now firmly understood that financial service providers are in a unique position to act as powerful advocates for change, using their influence to incentivise sustainable practices and support environmentally and socially responsible businesses.
There have been some encouraging developments of late. A growing number of nations and institutions are pledging to end their support for oil, gas, coal and deforestation, with research from NGO Oil Change International finding recently that since the Glasgow Statement, a commitment forged at the 2021 UN climate summit, an estimated US$5.7bn is being shifted out of fossil fuels and into clean energy every year.
Elsewhere, environmentally friendly products are defying the downward trend in overall trade, with growth in ‘green’ goods like electric and hybrid vehicles hitting 4% in the second half of last year, according to the United Nations Conference on Trade and Development.
And as an industry, we’re getting closer to figuring out what sustainability in trade actually looks like, with the recent launch of an International Chamber of Commerce-led pilot to assess the sustainability performance of trade transactions – beginning with banks and their corporate clients in the textile sector.
Yet, at the same time, UN scientists in March delivered a “final warning” on climate change. Rising greenhouse gas emissions are pushing the planet to the brink of irreversible change, with new fossil fuel projects deemed incompatible with keeping global warming within 1.5°C.
And despite their Cop26 pledges, key countries and significant finance providers are either failing to publicly reveal exactly how they will meet their commitments or breaking their promises entirely.
In the last few weeks, two major insurers have announced their plans to withdraw from the Net-Zero Insurance Alliance, citing either antitrust risks in the collective pursuit of decarbonisation goals or a desire to focus instead on supporting clients in their own transition, while reportedly continuing to underwrite new oil and gas projects.
Our Q2 ESG & Trade issue is published against the backdrop of a complex and evolving sustainability landscape, as awareness grows, specific policies and practices continue to develop, and the finance industry finds its footing.
Our coverage is diverse. In our modern slavery report, we investigate the extent to which existing regulation has reduced forced labour in supply chains, what new laws are designed to achieve, and the steps business can take to break the cycle of worker exploitation.
Elsewhere, we explore how the shipping sector is tackling its green transition and the role of financial services in speeding up decarbonisation; we examine how trade in natural gas could threaten the transition away from fossil fuels; and we look at what needs to be done to ensure the Regional Comprehensive Economic Partnership, the world’s largest trade agreement, is a driver of – rather than a barrier to – the sustainable trade ecosystem of the future.
At GTR, within our own organisation, we’re cognisant of our particular impact on the natural environment. From this publication onwards, we now commit to all our magazines being printed on sustainably harvested FSC-certified paper, using vegetable-based inks which are both renewable and eco-friendly, and packaged in entirely biodegradable bags instead of traditional plastic, all at our own expense.