Over 89% of banks say sustainability remains relevant in trade finance, and ICC now defines its product labels
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ICC's principles now set out when a trade deal can be called green, social or sustainability-linked. A survey of banks and a development bank program show how the idea is used in practice.
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01 · Relevance
Over 89% of banks say ESG and sustainability remain relevant in trade financing
Most banks still see sustainability as part of trade finance.
is the set of tools that help buyers and sellers trade safely across borders. stands for environmental, social and governance. It groups issues such as emissions, working conditions and how a company is run.
The Asian Development Bank's Global Trade Finance Gap Survey, published in December 2025, found that over 89% of banks say ESG issues and sustainability remain relevant in trade financing.
Banks also see a role for carbon data. Over 59% of bank respondents say supply chain traceability around carbon emissions could factor in risk and credit decisions, the ADB reports. Traceability means being able to follow goods, and their emissions, back through the supply chain.
Rules are still moving. Changing government ESG policies remain a challenge for 39% of respondents, according to the same survey.
Figure 1
How banks weigh sustainability in trade finance, 2025
Each card shows one survey measure and who it counts.
Source: Asian Development Bank, ADB Brief No. 378, ADB Global Trade Finance Gap Survey, December 2025.
02 · The ICC framework
ICC's sustainable trade principles went sector-agnostic in 2024
The International Chamber of Commerce, or ICC, built its sustainable trade rules in steps.
The first wave of ICC's principles was piloted by over 30 banks and corporates. On December 4, 2023, ICC published an update, called Wave 2. It covers agriculture, energy and automotive, according to ICC. Wave 2 also added a graded score. The score helps users compare how sustainable one trade transaction is against another.
Wave 3 followed on November 5, 2024. It made the principles sector-agnostic, which means they apply to any industry. ICC assesses four parts of a deal: the , the buyer, the seller and the distribution of the goods, according to its Wave 3 announcement. Use of proceeds simply means what the money pays for.
"Now sector-agnostic, the Principles for Sustainable Trade offer simplified, high-level principles"
International Chamber of Commerce, Wave 3 announcement, November 5, 2024
Figure 2 · Interactive
Four steps in ICC's sustainable trade standards
Tap a step to see what ICC added. The last tab is the product rulebook in force today.
Sources: International Chamber of Commerce, news releases of December 4, 2023 and November 5, 2024; ICC Principles for Sustainable Trade Finance, December 2025.
03 · Product labels
Four product types now carry ICC definitions
ICC now spells out what each sustainable trade finance label means.
The ICC Principles for Sustainable Trade Finance, dated December 2025, cover four types of product. They are the Principles for Green Trade Finance, the Principles for Social Trade Finance, the Principles for Sustainability-Linked , and the Guidance on Sustainability-Linked Trade Finance (p. 4).
Green and social products work on use of proceeds. For a green label, the money must be "clearly and verifiably allocated to green purposes", the ICC principles say (p. 6). In plain terms, a lender must be able to show where the money went.
works differently. Its terms are tied to agreed targets, often called , or key performance indicators. A KPI is a measurable goal, such as a cut in a supplier's emissions.
The principles also define a . It is a company that earns more than 90% of its revenue from social or green activities (ICC, p. 5).
04 · Supplier programs
Development banks tie supplier finance pricing to environmental and social scores
A supplier's environmental and social record can change what its finance costs.
is a program led by a large buyer. The buyer approves its suppliers' invoices. The suppliers can then sell those invoices to a finance provider and get paid early. The large buyer is called the . One name for this kind of arrangement is a .
The International Finance Corporation, or IFC, is a : a public institution that invests in and lends to private firms in developing markets. Its Global Trade Supplier Finance program is a $500 million program established in 2010. In 2016, IFC used it with KiK and PrimeRevenue to give KiK's suppliers short-term working capital, starting in China, according to an IFC press release of July 18, 2016.
The program used tiered pricing. Suppliers that scored strong environmental and social performance got lower costs, IFC said. Our guide to payables finance explains how these programs run, and our guide to trade finance platforms covers the technology behind them.
Figure 3 · Try it
What a KPI-linked margin step is worth on one invoice
Set the invoice, days and margin step. The result shows the difference in the early-payment discount.
Days financed
Discount at the full rate
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Discount if the KPI is met
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Difference to the supplier
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How it works: the discount equals the invoice times the all-in rate times the days, divided by 360. The result is the discount at the full rate minus the discount at the stepped-down rate.
Our Research Desk used simple interest on a 360-day year: invoice x rate x days / 360. The rates and margin step shown are for illustration and are not Ossiano pricing; ICC principles do not set step sizes.
This calculator explains the concept only. Program terms, KPIs and margin steps vary by buyer, supplier and finance provider.
Here is how to read Figure 3. The is the charge a finance provider takes for paying an invoice early. The all-in rate is the , a public benchmark, plus a for the provider's risk. The days are counted on an basis, the standard for US money markets set out by the Alternative Reference Rates Committee and used by the Federal Reserve.
In the worked example, the invoice is $1,000,000 and is paid 60 days early. At an all-in rate of 5.50%, the discount is $9,166.67. If the supplier meets its KPI and the margin steps down by 0.10 percentage points to 5.40%, the discount is $9,000.00. The supplier keeps $166.67 more. These inputs are for illustration only.
05 · Data
Carbon data is entering the credit file
To price a sustainability target, a lender needs data it can trust.
Over 59% of bank respondents in the ADB survey see a role for carbon traceability in risk and credit decisions. That data often travels with the trade documents themselves.
Standard digital documents make that data easier to use. On April 24, 2024, the ICC Digital Standards Initiative reported that 21 of 36 key trade documents already have standardized electronic versions, according to ICC. Our guide to data and AI in trade credit decisions explains how standard fields help a lender compare one shipment with the next.
06 · Ossiano view
Sustainability in trade finance now has a shared rulebook
OBSERVATION 01
Banks still weigh it
Over 89% of banks in ADB's 2025 survey say ESG and sustainability remain relevant in trade financing. Our reading is that the question has moved from whether to how.
OBSERVATION 02
Labels are now defined
ICC's December 2025 principles define four sustainable trade finance product types. Green proceeds must be clearly and verifiably allocated. Defined labels let a buyer, supplier and finance provider test a claim against the same text.
OBSERVATION 03
Supplier performance can be priced
IFC's 2016 program with KiK offered tiered pricing to suppliers with strong environmental and social ratings. Our reading is that pricing tied to supplier scores rewards the suppliers that invest in them.
Summary
Banks still value sustainability, and ICC's labels now say what each product means
Over 89% of banks in ADB's December 2025 survey say ESG and sustainability remain relevant in trade financing. Over 59% of bank respondents see a role for carbon traceability in credit decisions.
ICC built its rules in steps, and in 2024 made them apply to any sector. Its December 2025 principles cover four product types: green, social, sustainability-linked supply chain finance and sustainability-linked trade finance. Green money must be clearly and verifiably allocated to green purposes. In 2016, IFC's supplier finance program priced suppliers by their environmental and social scores. In the worked example, a 0.10 point margin step saves the supplier $166.67 on a $1,000,000 invoice paid 60 days early.
Related guides: Payables finance; Extending terms, keeping suppliers strong; Data and AI in trade credit decisions; Trade finance platforms; The trade finance gap.
Instrument cards: Payables finance; Dynamic discounting; ECA-backed finance. Every term on this page is defined in the Trade Finance Glossary.
For questions on how sustainability labels and KPI-linked terms apply to existing or planned trade finance relationships, contact the Ossiano Research Desk.
Sources
- Asian Development Bank, ADB Brief No. 378, ADB Global Trade Finance Gap Survey, December 2025. Supports: over 89% of banks say ESG and sustainability remain relevant in trade financing (p. 9); over 59% of bank respondents say carbon traceability could factor in risk and credit decisioning (p. 9); changing government ESG policies a challenge for 39% of respondents (p. 10); Figure 1.
- International Chamber of Commerce, ICC Principles for Sustainable Trade Finance, December 2025. Supports: four product types (p. 4); pure-play threshold of more than 90% of revenue (p. 5); use of proceeds clearly and verifiably allocated to green purposes (p. 6); Figure 2.
- International Finance Corporation, IFC partnership with KiK for supplier financing, July 18, 2016. Supports: Global Trade Supplier Finance, a $500 million program established in 2010; KiK supplier finance with PrimeRevenue, starting in China; tiered pricing and lower costs for suppliers with strong environmental and social performance.
- International Chamber of Commerce, ICC announces Wave 3 of the Principles for Sustainable Trade, November 5, 2024. Supports: sector-agnostic principles; feedback from over 30 banks and corporates; four assessment components: use of proceeds, buyer, seller, distribution; quote; Figure 2.
- International Chamber of Commerce, Updated ICC Principles to further standardise sustainable trade and trade finance, December 4, 2023. Supports: Wave 2 covers agriculture, energy and automotive; over 30 banks and corporates piloted Wave 1; graded score to compare how sustainable a transaction is; Figure 2.
- International Chamber of Commerce, ICC Digital Standards Initiative launches complete framework for supply chain digitalisation, April 24, 2024. Supports: 21 of 36 key trade documents already have standardized electronic versions.
- Alternative Reference Rates Committee, SOFR "In Arrears" Conventions for Syndicated Business Loans, July 22, 2020. Supports: Actual/360 as the standard US money market day count; Figure 3 method.
- Board of Governors of the Federal Reserve System, Selected Interest Rates (Daily), H.15, September 29, 2026. Supports: money market rates annualized on a 360-day year; Figure 3 method.
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