In it for the long haul

22.04.2021 Global Trade Review

In Q1 2021, GTR hosted a roundtable discussion that brought together several industry players to examine the impact of the Covid-19 pandemic on the incorporation of ESG in trade finance, and the role that the financing community must play in ensuring that progress continues to be made.

GTR: Far from being a ‘nice to have’ in the good times, we know now that sustainability is increasingly integral to how businesses operate. According to a recent HSBC Navigator report, businesses that prioritised sustainability felt better prepared for the current crisis – an important factor going forward, given that environmental risks are likely to intensify. But to what extent do we now have buy-in from all parties in the trade ecosystem specifically that sustainability is good business?

Sengupta: As we all know, Covid-19 has delivered a seismic shift in terms of underlining the importance of resilience in supply chains. It’s shone a spotlight on the role and responsibility of corporates to tackle environmental action, inequalities, social justice and the like. Interestingly, the observation has been that pre-pandemic, this has often been a buyer-led discussion. But what we’ve seen over the last months is that now it’s also a requirement from the smaller players, the suppliers, who are trying to work out how they transition.

In addition to this, the measure of success of a corporate has shifted significantly. Fifty years ago, the main driver of success was profit, which then gradually shifted to shareholder success. I think what has happened is that it’s now turned into an overall societal value which the corporate delivers that defines their success. This shift presents us all with a role to play because it is something that has to be done. It also presents a commercial opportunity for everybody involved.

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