International Chamber of Commerce (ICC) white paper identifies roadmap to boost the sustainability profile of US$700 billion export finance market
Published with the support of the Rockefeller Foundation and following extensive consultation with the global export finance community, the white paper is the first authoritative review of the state of sustainability across the export finance industry.
New York/Paris; September 22, 2021 – The International Chamber of Commerce has today released a white paper on the state of sustainability in the export finance industry at a major event during United Nations General Assembly week.
Developed with the support of The Rockefeller Foundation and 16 leading banks, the white paper explores how the US$700 billion export finance industry can significantly increase its contribution to the achievement of the United Nations Sustainable Development Goals (SDGs) and the Paris climate accord.
Export finance is used to enable the purchase of capital goods through loan agreements granted to importers and secured by sovereign guarantors – most commonly, an Export Credit Agency (ECA) in the exporter's home country. Despite its strategic importance in facilitating the types of capital expenditure called for by the SDGs, the asset class has previously received relatively little attention as a potential driver of sustainable development.
Through an extensive six-month market consultation of over 500 market participants and more than 150 interviews – including with export credit agencies, government authorities, banks, buyers, exporters, industry associations and civil society – the white paper presents for the first time product and policy recommendations to accelerate the flow of export financing towards sustainable activity globally.
The report concludes with a number of headline recommendations, including:
Aligning ECAs, bilateral development finance institutions and domestic financing initiatives to enable a “whole of government” approach towards global sustainability commitments;
Scaling support for innovative export finance deals, including leveraging blended finance structures to meet the capital expenditure needed to meet the SDGs; and
Reviewing – and potentially revising – the OECD’s framework governing the operations of ECAs to allow for more flexibility and incentives for transactions that support global sustainability goals.
John W.H. Denton AO, ICC’s Secretary General, said: “The whitepaper provides a clear call to action to rethink the sustainability performance of the export finance market. An essential first step should be to align the mandates of export credit agencies with key global sustainability goals – a common sense move that, as our paper shows, would pay a major dividend in scaling the availability of cost-effective finance for the capital goods needed to deliver on the promise to build back better from the Covid-19 pandemic.”
Adam Connaker, Innovative Finance Director at The Rockefeller Foundation said: “This White Paper highlights the significant current contribution and future potential of the Export Finance industry to support the achievement of the SDGs, demonstrating how the Export Finance industry is another tool in the arsenal of sustainable finance products to bring us closer to a more sustainable future.”
The report was authored by Acre Impact Capital, an impact-focused investment manager and International Financial Consulting a consulting firm focused on financing the global development agenda.
Hussein Sefian, Founding Partner of Acre Impact Capital said: “To date, the Export Finance market has only received a cursory mention in the broader sustainable finance conversation. Yet, Export Credit Agencies, working closely with their banking partners, have an excellent track-record of delivering investments at scale – in particular, in essential infrastructure. There is huge untapped potential for the Export Finance market to fill the financing gap in emerging markets and contribute to the sustainable finance ecosystem.”
Diana Smallridge, President and CEO of International Financial Consulting said: “The resounding message from industry participants is the urgent need for change. Individual banks, ECAs and Governments are taking welcomed unilateral steps to promote more sustainable exports. However, the real opportunity to propel the industry forward lies in a multilateral approach bringing market participants together to push for a common sustainability agenda.”
This White Paper is an independent report combining market sentiment data with quantitative trends and qualitative insights. In the development of this White Paper, International Financial Consulting Ltd. and Acre Impact Capital conducted desk research, online surveys, and an extensive interview program with leading market participants in the Export Finance and Sustainable Finance ecosystem.
The full methodology is described in the full report which can be accessed here.
ICC is the institutional representative of more than 45 million companies in over 100 countries with a mission to make business work for everyone, every day, everywhere.
Through a unique mix of advocacy, solutions and standard setting, we promote international trade, responsible business conduct and a global approach to regulation, in addition to providing market-leading dispute resolution services. Our members include many of the world’s leading companies, SMEs, business associations and local chambers of commerce. Follow us on Twitter @iccwbo.
About The Rockefeller Foundation
The Rockefeller Foundation advances new frontiers of science, data, and innovation to solve global challenges related to health, food, power, and economic mobility. As a science-driven philanthropy focused on building collaborative relationships with partners and grantees, The Rockefeller Foundation seeks to inspire and foster large-scale human impact that promotes the well-being of humanity throughout the world by identifying and accelerating breakthrough solutions, ideas, and conversations. For more information, sign up for our newsletter at rockefellerfoundation.org and follow us on Twitter @RockefellerFdn.
About Acre Impact Capital
Acre Impact Capital invests in climate-aligned infrastructure by partnering with leading commercial lenders and Export Credit Agencies. Acre Impact Capital’s Export Finance funds address the estimated $100 billion annual infrastructure financing gap in Africa, driving economic growth and providing essential services for underserved populations. www.acre.capital
About International Financial Consulting Ltd.
International Financial Consulting Ltd. was founded in 2000 to enhance the capacity and performance of government-owned financial institutions, such as Export Credit Agencies, Exim banks, and multilateral, regional, bilateral and national DFIs. Offering specialised expert advisory services, their mission is “Better Institutions, Better Outcomes”, supporting client institutions to better align their activities toward contributing to achievement of the World’s To-Do List, i.e. meeting the UN Sustainable Development Goals. www.i-financialconsulting.com