A fresh group of banks from Africa, Asia and Europe has endorsed the International Chamber of Commerce’s (ICC) definition of green trade finance, signalling ongoing interest in ESG financing despite cooling political sentiment.
BNP Paribas, Intesa Sanpaolo, Natixis, Rabobank, Société Générale, Standard Bank and United Overseas Bank (UOB) have all aligned with Principles for Green Trade Finance (PGTF), which are part of broader principles for sustainable trade finance, the ICC said on November 5.
The lenders join peers such as Commerzbank and ING which announced their endorsement of the broader principles earlier this year.
But Deutsche Bank and HSBC, two members of the core group of five banks that helped create the guidelines, have not yet endorsed them. HSBC last year described its role in developing the principles as “instrumental”.
A spokesperson for HSBC told GTR: “We remain focused on supporting our clients and continue to align our sustainable trade finance offering with industry best practice.”
Deutsche Bank did not respond to a request for comment.
Alongside the PGTF, the ICC said it is still developing principles for social trade finance and sustainability-linked supply chain finance.
The new wave of support “reflects strong market alignment around a common methodology to embed sustainability into the core of global trade”, the ICC’s head of sustainability, Raelene Martin, said in a statement.
“We are deeply grateful for the leadership these institutions are showing in helping shape a framework that is both globally relevant and operationally practical.”
The principles seek to provide a globally applicable definition of sustainable trade finance, and are compatible with green loan principles from the Loan Market Association.
There are currently no globally agreed regulatory standards on what constitutes overall sustainable finance. However, Martin told GTR that banks’ endorsement of the principles should be seen as a formal recognition that they “represent the authoritative industry standard for assessing sustainability in trade finance”.
“It signifies that the institution is committed to operating in close alignment with the principles, while acknowledging that full adoption may be staged over time,” she said. “It also shows that the endorsing entity signals to the market that the ICC PGTF is the correct path for industry convergence.”
Jean François Denis, global head of trade solutions at BNP Paribas, described the principles as “a first important step of the industry towards a global ‘sustainable trade and trade finance’ framework”.
The latest endorsements “bring total market coverage to approximately 70% of Europe’s trade finance sector”, the ICC said. UOB and Standard Bank have become the first lenders headquartered in Asia and Africa, respectively, to endorse the principles.
“We believe that clear, globally aligned standards are essential to scaling green finance solutions for Africa’s future,” said Noloyiso Mpanza, executive lead for sustainable finance in transaction banking at Standard Bank.
Standard Chartered announced in September it had provided what it said was the first trade finance product structured to align with the ICC principles, in the form of a guarantee to a Shanghai green technology firm.
