Overview
Sustainable trade finance refers to financing that supports goods or services produced in a manner that minimises adverse environmental or social impacts or risks, or that promotes environmental protection or social benefits. By offering companies the products and solutions they need to achieve their sustainability agendas, sustainable trade finance can be a catalyst for greening the global supply chain.
Through guides and frameworks, the Green Finance Industry Taskforce (GFIT) – which is convened by MAS – is committed to scaling green trade finance in Singapore.
Key Facts and Trends
80% of global carbon emissions
International trade
International trade contributes substantially to economic growth, yet it is also responsible for approximately 80% of global carbon emissionsSustainability Trade Finance Hub - Trade Finance Global .
78% of MNCs
remove suppliers that endangers their carbon transition plan
A study by Standard Chartered also reveals that 78% of MNCs will remove suppliers that endangers their carbon transition plan by 2025Carbon Dated: The net-zero supply chain revolution, 2021, Standard Chartered .
Loss of US$146.6 billion
in export revenue if fail to cut carbon emissions
Notably, Singapore-based suppliers can potentially lose US$146.6 billion in export revenue if they fail to cut carbon emissions in line with MNCs’ net zero plansSingapore-based suppliers that fail to cut emissions may lose US$146.6b in annual revenue: survey, June 2021, Business Times .
MAS’ Initiatives
Green and Sustainable Trade Finance and Working Capital Framework
In May 2021, GFIT issued the Green and Sustainable Trade Finance and Working Capital (GTF) Framework to help banks assess eligible green trade finance transactions.