Green trade under the European Bank of Reconstruction and Development's (EBRD's) Trade Facilitation Programme (TFP) is growing, according to the bank's Task Force on Climate-related Financial Disclosures (TCFD) Report 2021.

Published to coincide with the COP 27 climate change conference in Egypt this month, the bank's third annual TCFD report discloses EBRD's climate risk assessment methodologies and initial portfolio risk assessments.

The TFP can be used to guarantee any genuine trade transaction to, from and within the banks countries of operations, including documentary letters of credit (L/Cs); trade-related standby L/Cs from issuing banks; deferred payment L/Cs, and L/Cs with post-financing advance payment bonds and payment guarantees.

Green growth

Transactions under TFP defined as green trade showed more than a 23 per cent increase from 2020 to 2021 according to the TCFD Report 2021.

It says Green Economy Transition (GET) eligible credit lines and guarantees for environmentally sustainable activities also grew from EUR 102 million (US$106 million) in 2020 to EUR 390 million in 2021, with 42 new green credit lines.

Recognising green achievements

Earlier this year the TFP recognised the most successful banks under its Green TFP with awards for their performance in 2021.

The Green TFP allows partner banks to use their existing trade finance facilities to finance exports, imports and local distribution of imported green technologies and materials, in line with the EBRD's Green Economy Transition (GET) approach.

Prizewinning banks

The prize for the most active issuing bank in 2021 in green trade went to Piraeus Bank in Greece. The bank facilitated the highest number of transactions under the Green TFP as an issuing bank, with a total greenhouse gas emission-reductions impact equivalent to taking 1,000 cars off the streets of Athens.

The prize for the most active confirming bank in 2021in green trade was awarded to UBS. The bank successfully supported the highest number of transactions under the Green TFP as a confirming bank, with an annual greenhouse gas emission-reductions impact equivalent to the carbon footprint of 3,400 Swiss households.

From 2016 to 2021, the Green TFP has supported 1,318 foreign trade transactions involving trade in climate change adaptation and mitigation technologies and materials, with a total volume of EUR 1.3 billion across 26 economies where the EBRD invests.

More details on EBRD's Task Force on Climate-related Financial Disclosures Report 2021 can be found here.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.