The International Chamber of Commerce (ICC) has announced the launch of a new set of Principles for Sustainable Trade Finance (PSTF) at the Sibos 2024 event in Beijing. The new principles were created in collaboration with leading financial institutions like HSBC and Deutsche Bank, industry experts, and the Boston Consulting Group (BCG). The goal is to offer a set of agreed-upon guidelines that define sustainable trade finance products. 

The PSTF is expected to offer clearer, transparent, and consistent guidelines to enable private equity and credit firms, banks, asset managers, and impact investors to channel their capital effectively towards sustainable and inclusive trade finance facilities to avoid greenwashing activities. 

Let’s explore the Principles for Sustainable Trade Finance launched by the ICC in detail. 

About the ICC’s Principles for Sustainable Trade Finance 

The PSTF is a set of rules or a framework for banks, corporations, and investors to use when they invest capital in sustainable trade finance facilities to avoid greenwashing practices. This framework addresses the gaps in most current market frameworks, which fail to accommodate the fluidity and complexity of trade finance transactions. 

The PSTF includes four different sections to categorize the principles: 

• 
  Principles for Green Trade Finance (PGTF). 
• Guidance on Sustainability Linked Trade Finance. 
• Guidance on Sustainability Linked Supply Chain Finance. 
• Ambitions on Social Trade Finance. 

The distinct categories are designed to provide detailed guidance that is tailored to the specific needs of trade finance. 

Open industry-wide consultation is underway 

With the PSTF document, the ICC has commenced an open consultation period on the framework. The ICC is inviting all stakeholders, investors, and concerned entities within the trade finance industry to review and give feedback on the document. This collaborative approach ensures that the framework is updated with the practical and flexible needs and insights of industry participants. As the consultation period ends, the ICC will finalize PSTF later this year and officially release it accordingly. 

On October 29, 2024, at 13:00 CET, ICC organized an online launch event to facilitate a deeper understanding of PSTF and encourage active participation in the initiative. The session will include a thorough walkthrough of the principles, and then there will be a 30-minute Q&A period. Participants in this session will get an opportunity to interact directly with PSTF’s authors and contributors, giving them a chance to influence the final version of the document. 

Next steps 

ICC has also designed a survey to gather more insights and feedback from industry professionals. You can choose to take part in the survey and share your insights. The PSTF will play a crucial role as a cornerstone in promoting sustainable trade finance globally. 

While you’re here…

Financial institutions, private equity and credit firms, asset managers, and impact investors that prefer capital allocation towards sustainable finance may benefit from the principles for sustainable trade finance released by ICC, as it can help them to be guidelines for making any investment decisions and avoid greenwashing. 

However, keeping up with latest news like this and assessing them accurately can be challenging. This is where Auquan comes into play. 

Auquan automates and streamlines deal sourcing, due diligence, monitoring, ESG/sustainability, and compliance workflows so teams can move faster and more efficiently. Using advanced AI, Auquan generates material and sustainability insights on any entity worldwide — public or private — fine-tuned for your team's investment and lending requirements.

Let's explore how Auquan can help you and your team eliminate tedious and time-consuming manual data work and focus more on what you do best.