The International Chamber of Commerce (ICC) has published a pilot version of the first-ever industry framework to assess the sustainability performance of trade transactions.
The “Wave 1” framework is the product of a year-long consultation with banks, corporates and technology providers — in partnership with Boston Consulting Group — based on the roadmap announced by ICC at the Glasgow climate summit.
The new ICC framework sets out an agreed industry definition of sustainable trade – taking into account both environmental and socio-economic factors. It also embeds an approach that covers the entire lifecycle of an international trade transaction across five different dimensions – from the buyer and supplier to the nature and purpose of the goods or services sold.
The Wave 1 framework relies on simplified scoring system to allow it to be readily tested by banks and corporates – recognizing continued industry challenges accessing the high-quality data necessary for more granular sustainability assessments.
Raelene Martin, ICC Head of Sustainability, said: “We have been careful to ensure that this initial framework is immediately implementable – making use of recognized standards, data and technology that are readily available to banks and corporates. This will allow us to test the framework in a real-world setting and build a more comprehensive view on the sustainability of global the value chain over time.”
At the COP27 climate summit, ICC Secretary General John W.H. Denton AO announced that more than 20 banks and corporates have pledged to pilot the application of the Wave 1 framework for transactions in the textiles sector.
ICC will publish the findings from these pilots and set out how it will use these results to enhance the framework by mid-2023.
Earlier, A month ahead of the start of this year’s United Nations climate summit (“COP27”), the International Chamber of Commerce has launched a call to banks, corporates and technology companies to participate in piloting a ground-breaking framework to grade the sustainability profile of individual trade transactions.
Following an extensive global consultation exercise earlier this year on the initial recommendations set out in ICC’s white paper on “Standards for Sustainable Trade and Sustainable Trade Finance”, the organisation – in partnership with Boston Consulting Group – has worked to define an initial framework capable of being piloted today in high-volume transaction environments.
To this end, the “wave one” ICC Sustainable Trade Framework will work on the basis of a simple matrix to determine whether the different elements of a transaction are sustainable.
In order to focus resource in this first phase of the project, ICC has taken the decision to focus the piloting of the new Sustainable Trade Framework on the textile industry. As such, for the purposes of the “wave one” framework only textile-specific standards have been approved by ICC for measuring the relevant components of any given transaction.
More information about ICC Standards for Sustainable Trade and Sustainable Trade Finance:
