Home Banking Swiss charterers and shipping firms beat UK rivals to green trade finance

Swiss charterers and shipping firms beat UK rivals to green trade finance

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Research reveals stark difference between Switzerland-based firms and UK rivals’ ability to obtain preferential green trade finance terms based on compliance with banks’ carbon-reduction and sustainability requirements                                                   

UK –14th June 2022 – More than half (54%) of Switzerland-based carriers, forwarders and charters obtain preferential green trade finance by demonstrating compliance with banks’ carbon and sustainability requirements, compared with 46% in UK, reveals new research by Pole Star, the global leader in vessel tracking and sanctions screening for maritime and risk intelligence.

Conducted among 502 senior decision-makers, heads of trade, compliance and finance at shipping industry companies, banks and financial organisations in Switzerland and the UK, the research reveals Swiss carriers, forwarders and shippers are more likely to prioritise the green agenda, with 98% saying carbon-reduction and sustainability concerns are a high or medium priority for their organisation, compared with 83% in the UK.

And as climate change and sustainability concerns become embedded in trade finance, 98% of Swiss firms and 92% of UK firms say trade finance organisations have asked them to show compliance when seeking preferential terms.

“These findings show that while the whole of international trade needs to up its game, the Swiss-based organisations currently have the edge,” said Charles Ike, Regional Head of Financial Markets Compliance, Pole Star.

“But the stark reality is that all carriers, forwarders and charterers need to address compliance as a business-critical question. Forwarders and charterers are losing out on highly advantageous finance terms because they cannot show they are compliant with the green agenda. Even if you are compliant, you still have to demonstrate it.

The higher rate of requests for evidence of compliance from trade finance organisations in Switzerland may explain why Swiss shipping businesses are more likely to demonstrate it. But Swiss shipping firms may also be more successful in applying for green finance because only 73% of Swiss banks and trade finance organisations are currently able to screen carriers and vessels, compared with 92% in the UK.

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