A distinct message arises as we approach the conclusion of this in-depth examination of sustainable finance and trade: the sustainability transition is not optional; it is essential.  

The contours of a swiftly evolving landscape have been delineated throughout these chapters, as environmental, social, and governance (ESG) criteria are becoming foundational pillars of trade and finance. Sustainable financing methods, such as biodiversity-linked guarantees, transition finance, green bonds, and ESG-linked trade credit, are transforming the flow of money between countries and industries.

Historically driving global commerce, trade finance institutions now face the challenge of assuming a transformative role. However, as we have observed, this transformation is intricate. While Europe and Asia are leading the way with their detailed systems and unified guidelines – like ESRS, ISSB, and TNFD – other regions struggle due to weak institutions, mixed policies, or poor reporting practices.  For example, Africa and Latin America hold considerable economic promise but have trouble getting funding and meeting global standards.

We have also found several structural issues, such as the lack of representation for small and medium-sized enterprises (SMEs), the risks of greenwashing, the rising costs of compliance, and inconsistent data, which may exacerbate the sustainability gap. The digital gap, for one, makes it much harder for SMEs in developing countries to show how they affect the environment and society.

Even if these problems are common, there is nothing in the way of moving forward. All of these things are helping the industry move toward a future where ESG disclosures are more and more digital (using technologies like XBRL), nature-based risk integration, and financial instruments that are open to everyone. Harmonised standards are also a factor. At present, a collective transition from commitment to execution is necessary.

Projected instrument share in sustainable finance by 2030. Source: Climate Bonds Initiative

“Operating at the intersection of (trade) finance, technology, and sustainability, I see a tremendous opportunity for policymakers and regulators to accelerate the push for interoperability across standards and frameworks at a global scale,” said Fleur Boos, Founder and Co-owner of The Value Department. “By aligning our systems, we can unlock the potential of trade finance to drive inclusive growth, enabling smallholders and SMEs to access global markets, build resilience, and thrive. A connected, interoperable future is within reach, and the time to act is now!”

Sustainable finance instruments: 2024 vs 2030 projections. Source: TechSci Research, Natixis, Bloomberg Intelligence, ESG Investing, The World Bank, BNP Paribas, Grand View Research

Yet, more actions are required:

• Regulators must accelerate convergence by ensuring that disclosure standards, taxonomy definitions, and assurance methods are uniform in every nation.
  
• Financial institutions need to implement ESG risk assessments as an ordinary component of their work, put money into scalable data infrastructure, and make it easier for SMEs who may require additional sources of funding.
  
• Policymakers must incorporate proportionality into the standards to ensure that ESG frameworks are accessible to everyone and can evolve according to their specific needs.
  
• To bridge the digital gap, tech companies need to make ESG reporting systems that are simple to set up and use effectively for SMEs and emerging economies.

This will allow the trade finance ecosystem to provide the basis for the shift to a climate-resilient and fair global economy.