Figure 2: Percentage of total negative value contributed by global trade by largest negative contributions
Other 13%
Zero
hunger 34%
Clean water 11%
Sustainable cities 12%
Figure 4 highlights the fact that trade in the poorest economies has a completely different structure from trade in developed world economies. For example, Madagascar’s cereal imports were some US$206m in 2020, while automotive imports were similar at just US$214m and on a steady downward path since 2017. In other words, imports are often for subsistence purposes rather than aimed at meeting luxury or consumption-based markets. Under these circumstances a ‘better’ ranking, insofar as it reflects lower economic development, is not necessarily a good thing. But what it does mean is that the SDG-related risks of trade are lower and that such countries should not be excluded from trade deals or trade finance on the grounds of sustainability since, comparing like with like, their trade is less environmentally damaging.
Affordable clean energy 14%
Responsible consumption 16%
Source: Coriolis Technologies For example, Germany’s global trade
improved from -0.58 to -0.57, and while this may not seem a huge improvement, it was caused by nearly 14% annualised growth in vaccines to the end of 2020, a result of the Covid-19 pandemic. The largest and most manufacturing-heavy economies fare the worst of the G20 in terms of the sustainability of their trade: the EU’s trade, whether in the region itself or between the EU and the rest of the world, has the lowest score, but China, South Korea, Japan and Mexico also tip above the -0.6 mark. These are economies where automotives, consumer electronics as well as machinery and components (including computing) are routinely among the top five sectors for both imports and exports. Interestingly, the UK has one of the better scores for the developed economies, but this reflects a smaller manufacturing base and a higher contribution of sectors such as ‘Works of Art’ – its tenth largest sector for exports – which are not measured against the SDGs. The other positive aspect of this scoring system is it does not bias the sustainability risk against emerging economies, or oil-producing economies. Within the
48
G20 it is the emerging economies, with the exception of China and Mexico, that have the best scores, albeit still negative. Within the G20, oil-producing economies have among the better scores – not because exporting fossil fuel is necessarily a good thing, but because they are less reliant on energy imports. For the poorest nations, the scores are materially lower – between -0.39 and -0.52 (Figure 4).
US$4trn
Anticipated global sales conducted via B2B marketplaces in 2025
Be Shaping the Future (
be-stf.de)
Implications for trade policy This scoring system is a wake-up call for world trade and policymakers all around the world. Some of the most advanced economies have the least sustainable trade, the value of which is estimated at around US$18.5trn negative contributions, that eats into trade from responsible consumption and production (SDG 12). If we are to meet the ambitious targets laid out at COP26, we cannot afford to ignore the messages here – that the majority of world trade is unsustainable, and where it is not, it is often a symptom of under- development. There is work to be done on this type of metric. For example, breaking down each SDG into its ‘E’, ‘S’ and ‘G’ contribution in trade terms is the next iteration of this model. Early indications suggest that it will reduce the scores further rather than improve them. Country scores also need to reflect the regulatory context of each country and the extent to which the tariff and non-tariff systems reflect sustainability objectives. This, however, will bias the results back in favour of countries with better regulatory regimes, so what has been presented here represents a neutral model based on the trade profile and patterns of any given country. Its other advantage lies in its potential
policy application. First, since we know where the worst contributions to SDGs are likely to be across world trade, we know the levers to pull. Too much of world trade contributes negatively either to zero hunger (making access to food worse), or to climate conditions like affordable and clean energy, clean water and sustainable cities.
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