Sustainability and sustainable trade have become essential to corporate strategy and operations, and their importance in trade is set to grow further.
Commerzbank partnered with Oxford Analytica to provide an original outlook for sustainable trade over the next 10-15 years by exploring five key drivers.
The five drivers of sustainable trade identified in this report are:
- Regulatory competition and protectionism
This is of particular relevance in Europe, where the regulatory environment is most advanced. However, considerable scope also exists for the abuse of sustainability concepts for reasons relating more to protectionist measures than concern for ‘people’ and ‘planet’.
- New patterns of global demand
Massive population growth in the global middle class is increasing demand for tradable goods and services, placing considerable strain on natural resources. Firms and industry groups will be forced to prioritise efficiency and sustainability in their operations.
- Supply chain trends
Firms will need to be proactive about uncovering potential sustainability-related risks in their supply chains. An emphasis on transparency is critical, given the growing ‘monitoring’ role of online media, NGOs and consumer groups. The sustainable trade agenda will also become more closely aligned with cost efficiencies and security of supply of inputs.
- Alliances, standards and labels
Corporations will partner more frequently with their stakeholders in order to find opportunities for improving sustainability. Open collaboration with NGOs, suppliers and consumers will increasingly generate innovative ideas. Alliances will try to pre-empt the imposition of regulation by self-regulating on sustainability issues.
- Innovative finance and the role of banks
With increasingly stringent requirements on firms engaged in trade to demonstrate sound strategies for sustainability-related risk exposure, it will become necessary for firms to evaluate their sustainability performance in order to obtain financing.