Four of the world’s leading trade finance banks have endorsed new industry standards designed to bring clarity and consistency to sustainable finance practices in the global trade sector.

Commerzbank, ING, Santander, and Standard Chartered announced their backing of the International Chamber of Commerce’s Principles for Sustainable Trade Finance, collectively representing about 25% of the global trade finance market by volume.

The framework, developed in collaboration with Boston Consulting Group, seeks to address a longstanding challenge in the sector where practitioners have lacked clear, consistent definitions of what constitutes sustainable trade finance. 

“We welcome the endorsement of the ICC Principles for Sustainable Trade Finance by four leading banks,” said Philippe Varin, ICC Chair. “This is a strong signal of market alignment behind a common framework to scale sustainable trade finance in a practical, credible and commercially viable way.”

Global trade represents as much as 30% of carbon emissions. The ICC principles are designed to mitigate this impact, supporting businesses in limiting global warming to 1.5°C above pre-industrial levels as per the Paris Agreement, as well as meeting the United Nations’ (UN) Sustainable Development Goals (SDGs).

They provide detailed methodology for evaluating sustainable trade finance transactions, including guidance for assessing use-of-proceeds in trade finance deals, proposed due diligence protocols for sustainability verification, and unified reporting standards across financial institutions.

Unlike other financial products, trade finance’s “flow” nature makes it difficult to determine the intended purpose of goods or services at the point of origination. As such, the principles address four distinct types of trade finance products: Green Trade Finance, Sustainability-linked Trade Finance, Sustainability-linked Supply Chain Finance, and Social Trade Finance. 

The framework builds upon existing standards including the Loan Market Association’s Green Loan Principles and the International Capital Market Association’s Green Bond Principles, whilst adapting them for the unique characteristics of trade finance transactions.

Standard Chartered, which introduced its sustainable trade finance proposition in 2021, described itself as a “pioneering advocate for sustainable trade finance standards across the industry.” Sofia Hammoucha, global head of trade and working capital at the bank, said the lender was “pleased to adopt ICC’s principles.”

The framework aims to reduce greenwashing risks whilst enabling financial institutions, corporates, and investors to channel capital more effectively towards sustainable and inclusive trade finance facilities. It provides banks with tools to assess transactions based on either the purpose of a deal or the nature of goods being financed.

As a next step, the ICC plans to expand the principles to include social sustainability definitions and work with the broader trade ecosystem to secure additional endorsements. The chamber expects to announce further bank endorsements around the third quarter of 2025, ahead of the COP30 climate summit in November.

Ravi Hanspal, a Partner at Boston Consulting Group, said the formal recognition by leading global financial institutions represented “a huge step forward” in accelerating sustainable trade and decarbonising complex supply chains.

Financial institutions have been facing increasing pressure from regulators and investors to demonstrate the environmental credentials of their lending portfolios whilst avoiding accusations of greenwashing.