Greening Trade

Greening Trade – Rethinking Global Trade for a Sustainable Future 

In our “Climate & Trade” project, we have embarked on pioneering work aimed at leveraging trade agendas to contribute to a just climate and sustainability transition. To further increase impact, we connect the dots to sustainable finance instruments and different legislation.  

We need to transform global trade into a fair system that benefits all and aligns with climate and sustainability goals 

While trade has, in the past, been a contentious issue from a climate and environmental perspective, it also has the potential to be a driving force for positive change. Our “Climate & Trade” project aims to address this potential by tackling the following preliminary key objectives: 

• Building Trust: Trust is the linchpin that holds international climate efforts together. We believe that trust is the foundation upon which we need to reshape global trade, making it work for everyone involved. Internationally aligned climate action is under threat, partly due to growing mistrust and fear of protectionism ensuing from domestic, regional or unilateral climate policies that are not yet aligned with partner countries’ priorities and needs. Building this trust is key to actually meeting global climate and sustainability goals. 

• Transparency: Transparency is the bedrock of equitable trade and the basis for building trust. We believe that transparent trade flows and supply chains that work for all stakeholders foster accountability and fairness. We highlight the important role of disclosure frameworks, supply-chain regulations and sustainability reporting legislations for climate- and environmentally friendly trade agendas as they lead to the generation of data and transparency. For more on disclosure, please have a look at our publications here. You can find our publications on the topic of supply chains here and here. 

• Whilst Climate & Company recognises an increasingly complex geopolitical environment which can impact negatively on international trade relationships, this makes – even more urgent – the need for fresh leadership and thinking which can break new ground in our common goal of saving our planet. 

We offer strategic recommendations for philanthropy’s role in building a sustainable and trustworthy global trading system 

To achieve our mission, we have partnered with ClimateWorks Foundation’s Global Intelligence Team, focusing on philanthropic interventions in the realm of ‘green trade’. With a special focus on trade flows with the EU, we emphasise the alignment of trade with climate goals, ecosystem and forest conservation while addressing distributional concerns and sustainable finance instruments. 

• Research & Analysis: Climate & Company, in collaboration with renowned researchers, conducted a comprehensive scan of the climate, trade and sustainability landscape between May and November 2023. We have explored the intricate connections between: 

• Political trends in international trade 
• Domestic and international climate policy developments relevant to trade relations, such as supply-chain regulations and carbon pricing mechanisms (with a special focus on the EU’s Carbon Boarder Adjustment Mechanism, CBAM) 
• Sustainability reporting standards and transparency-oriented sustainable finance instruments, with a special focus on disclosure frameworks and taxonomy legislations. 

• Recommendations: Building on our analysis, we have crafted strategic recommendations for philanthropy’s role in helping to work towards a new, trustworthy, and sustainable trading order. With this bottom-up approach, we contribute to better international cooperation in achieving a just climate and sustainability transition. You can find them here.