In a video interview with The Banker – published by the Financial Times – Commerzbank’s experts, Ruediger Geis, Head Product Management Trade, and Ruediger Senft, Head of Corporate Responsibility, discuss how financial institutions play a decisive part in driving sustainability in world trade.
Referring to a recent Commerzbank report, Insights: Scenarios for the Future of Sustainable Trade, Ruediger Geis notes that over the next 10-15 years, the peaks and troughs of supply and demand in trade will depend on access to resources and the impact of protectionist measures. Of course, any type of short term regional economic volatility will always be a challenge, but the growth of the global economy will continue be a key driver of sustainable trade.
Therefore, Geis explains that in order to keep up with the changing trade finance landscape, a long-term perspective on sustainability should be adopted. He argues that as the prime financiers of commerce, banks are best placed to ensure that supply chains conform to ethical, social and environmental best practice. In fact, Geis calls for banks to promote a “business case” for sustainability, and – like Commerzbank – “adopt it in bottom lines”.
Ruediger Senft agrees, adding that both financial institutions and companies have an obligation to “regard sustainability as the norm”. He identifies transnational regulation as a driver of increased sustainability, which can “bring sustainability to the core of the banking business”. He also suggests that there will be a greater demand from the public for transparency on sustainable practices, and therefore, such practices will continue to grow in importance for big corporates, SMEs and their investors.
With issues of sustainability increasingly rising up the agenda for management, Senft explains that banks can better mitigate reputational risks. In fact, this is why Commerzbank’s reputational risk management team “analyses over 5,000 transactions a year” for potential ethical, social and environmental concerns – highlighting that “the Commerzbank approach is to take such measures seriously”.
You can watch the video online here.