ICC Rolls Out Call for Businesses in Textiles Sector to Test New Sustainability Framework for Trade Transactions
The International Chamber of Commerce (ICC) has launched a call to financial institutions, corporates, and technology firms to pilot a ground-breaking methodology for grading the sustainability profile of individual trade transactions.
After a large-scale global consultation on the initial recommendations in the ICC's white paper on "Standards for Sustainable Trade and Sustainable Trade Finance" earlier this year, the organisation has worked with Boston Consulting Group to create an initial framework that can be tested in high-volume transaction environments.
To this end, the "wave one" ICC Sustainable Trade Framework will use a simple matrix to figure out if the different parts of a transaction are sustainable. It will use easily accessible data and globally recognised sustainability standards to make sure the assessments are accurate. In this case, the ICC has decided to temporarily leave transportation out of the framework because shipping standards aren't as well developed as those in other industries.
Raelene Martin, ICC’s Head of Sustainability, said:
“Given the urgency of ensuring that trade and associated financing can contribute actively to meeting global sustainability goals, we have placed an absolute emphasis on delivering an initial industry framework that is immediately workable—while, crucially, integrating robust and recognised sustainability standards. Simply put: we aim to deliver a system capable of rewarding sustainable practices by companies across global value chains while eliminating the risks of greenwashing.”
In this first phase of the project, the ICC has decided to test the new Sustainable Trade Framework in the textile industry. This is to make the best use of resources. So, for the "wave one" framework, the ICC has only approved textile-specific standards for measuring the important parts of any given transaction.
ICC is now inviting applications from banks, corporations, and technology companies to test the framework for relevant transactions over three months. These pilots will be used to see how the framework works in practice for evaluating transactions. The results will be used to improve the framework and make it available to other industries.
“We see it as a vital step to carefully test the framework in partnership with banks, corporates, and fintechs to understand its utility and practicality in the real world. The findings of these pilots will feed directly into the elaboration of a broader framework, which we hope will be capable of being applied across a wide range of sectors and industries," added Ms. Martin.