Standard Chartered has announced its commitment to aligning its trade finance practices with the International Chamber of Commerce (ICC)’s Principles for Sustainable Trade Finance, making it the first international bank to officially adopt these guidelines. This milestone reinforces the bank’s focus on sustainable and responsible financing, ensuring greater transparency and accountability in global trade transactions.
Going forward, Standard Chartered will assess the sustainability of its trade financing based on the ICC’s criteria and its own internal transition finance and sustainable product frameworks. The principles cover green trade finance, sustainability-linked trade finance, and sustainability-linked supply chain finance, establishing clear guidelines on how sustainability claims should be evidenced, safeguarded, and reported. Unlike traditional sustainability-linked loan standards, these principles are specifically designed for trade finance, addressing a long-standing gap in industry.
Standard Chartered played an integral role in shaping the ICC’s framework alongside Commerzbank, Deutsche Bank, HSBC, ING, and Santander. However, it is the first to publicly adopt the principles, a move that could encourage wider industry adoption.
According to Ravi Hanspal, Partner at Boston Consulting Group, which assisted in developing the principles, the lack of clear and consistent definitions has previously limited the widespread adoption of sustainable trade finance. He sees Standard Chartered’s commitment as a turning point, setting a precedent for other financial institutions to follow.
“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,” Hanspal noted.
This move builds on Standard Chartered’s strong track record in sustainable trade finance. In its 2024 financial results, the bank reported that income from sustainable trade and working capital lending rose to $128 million, a 25% increase from $99 million in 2023. Last year, the bank also introduced a sustainable revolving credit facility tailored for commodity companies, further expanding its portfolio of green financial products.
Raelene Martin, Head of Sustainability at the ICC, welcomed Standard Chartered’s leadership in setting industry-wide sustainability standards, stating:
“Standard Chartered’s adoption of the ICC’s Principles for Sustainable Trade Finance marks an important step in aligning the industry around a common methodology for assessing sustainable trade finance. Their tremendous support is integral to our ongoing efforts to provide thought leadership and guidance for the global industry.”
While Standard Chartered’s adoption of these principles is a positive step, its sustainability record has faced scrutiny. According to the 2024 Banking on Climate Chaos report, the bank has financed $71 billion in fossil fuel projects since the 2016 Paris Agreement, making it the third-largest fossil fuel financier in the UK.
However, the bank has made progress in reducing its environmental impact. Its 2024 financial report revealed a 9% decline in emissions from its oil and gas portfolio compared to 2023, signaling a shift toward a more sustainable financing approach.
Standard Chartered’s leadership in adopting industry-wide sustainability principles could serve as a catalyst for greater transparency and accountability in global trade finance. By aligning with the ICC’s framework, the bank is not only enhancing credibility and standardization in sustainable trade practices but also reinforcing its commitment to responsible financing in a rapidly evolving financial landscape.
