Standard Chartered has announced it will align its trade practices with the International Chamber of Commerce (ICC)’s Principles for Sustainable Trade Finance, becoming the first international bank to do so.

Going forward, the bank will assess the sustainability of its trade financing based on criteria set by the ICC, as well as its own internal standards outlined in its transition finance and sustainable product frameworks.

The principles covers three product areas – green trade finance, sustainability-linked trade finance and sustainability-linked supply chain finance – and provides clear guides on how a deal claiming to be sustainable should be evidenced, safeguarded and reported to ensure transparency and adherence.

They are the first sustainability standards designed specifically for trade finance, unlike the widely-used Loan Market Association’s sustainability-linked standards, which were created for loans and can be difficult to apply to some trade products.

Standard Chartered is one of six banks that provided input to the ICC’s document, alongside Commerzbank, Deutsche Bank, HSBC, ING and Santander, and the first to officially announce its adoption of the principles.

One of the potential benefits of an independent standard is that it drives widespread adoption, creating uniformity that is currently lacking in the sector, Standard Chartered says in a press release issued this week.

This sentiment is echoed by Ravi Hanspal, partner at Boston Consulting Group, which helped develop the principles.

“Unlike for many other financial products, trade finance practitioners have not historically had a clear, consistent, and consensus definition on what constitutes sustainable trade finance, limiting its application,” he says. “The formal recognition and adoption of ICC’s Principles for Sustainable Trade Finance by a leading global financial institution is a huge step forward on this journey and is hopefully the first of many more.”

Standard Chartered’s adoption of the principles builds on its strong track record in sustainable trade finance. The bank reported in its 2024 results that its income from sustainable trade and working capital lending had increased to US$128mn, a roughly 25% increase from US$99mn in 2023. The bank launched a sustainable revolving credit facility offering focused on commodity companies last October.

“We are thrilled to welcome Standard Chartered’s adoption of the ICC’s Principles for Sustainable Trade Finance, which marks an important step in aligning the industry around common methodology for the assessment of sustainable trade finance,” says Raelene Martin, head of sustainability at the ICC.

“As one of the leading trade banks, Standard Chartered’s tremendous support is integral to our ongoing efforts to provide thought leadership and guidance that is fit for purpose for industry globally.”

Standard Chartered’s sustainability record has faced scrutiny. According to the 2024 Banking on Climate Chaos report, the bank has financed fossil fuel projects to the tune of US$71bn since the Paris Agreement on climate change was signed in 2016, and is the third largest fossil fuel financier in the UK.

However, financing amounts have declined over the past two years, and the bank reported in its 2024 results that emissions from its oil and gas portfolio fell by 9% compared to 2023.