ASIATODAY.ID, MANILA — Environmental, Social, and Governance (ESG) standards are rapidly becoming the decisive factor in global trade finance, as companies reconfigure supply chains and banks tighten sustainability requirements for cross-border funding, according to the Asian Development Bank (ADB).
ADB’s latest Global Trade Finance Gap Survey shows that 80% of banks expect demand for trade finance to rise, driven by market diversification, deeper intra-regional trade, and the restructuring of global supply chains.
Despite these shifts, the report estimates the global trade finance gap remained at $2.5 trillion in 2025, unchanged from 2023 and equivalent to around 10% of total global trade.
ADB warns that the persistent gap continues to constrain economic growth, particularly in developing economies where access to trade finance remains limited.
“Trade is central to economic development and has helped lift millions out of poverty,” said Isabel Chatterton, ADB’s Director General for Private Sector Operations on January 15, 2026.
“Without adequate trade finance, the global economy risks missing major growth opportunities. ESG-aligned financing will be critical to unlocking trade-led development going forward.”
ESG Moves to the Center of Bank Decision-Making
The ninth edition of the survey draws on data and insights collected between 2023 and 2025 from more than 110 trade finance providers, representing nearly one-third of the global trade finance market.
The findings show that nearly 90% of banks now factor ESG considerations into trade finance decisions, signaling a structural shift in how capital is allocated across global trade flows. ESG compliance is no longer optional, but increasingly a prerequisite for accessing cross-border trade financing.
However, ADB notes that capital outflows from ESG-focused investment funds have reduced the size of dedicated ESG capital pools, limiting their immediate impact on narrowing the global trade finance gap.
SME Access Improves, but Challenges Persist
Access to trade finance for small and medium-sized enterprises (SMEs) shows signs of improvement. More than 80% of banks report having dedicated strategies to support SME trade finance.
For the first time, SME rejection rates for trade finance fell to 41%, approaching those of large and mid-cap corporates at 40%. ADB cautions, however, that further research is needed to determine whether this convergence reflects a lasting trend.
AI and Digitalization Reshape Trade Finance
The report also highlights the rapid adoption of artificial intelligence (AI) across the trade finance industry.
Around 84% of banks already use AI for fraud prevention and risk assessment, while 57% are exploring its potential to expand financing capacity and improve operational efficiency.
ADB underscores that full digitalization of global trade processes by 2030, alongside the scaling up of innovative supply chain finance solutions that channel liquidity to lower-tier SMEs, will be critical to closing the global trade finance gap.
ADB’s Role in a Shifting Global Trade Landscape
Backed by its AAA credit rating, ADB supports trade, import, and export activities through guarantees and loans delivered via nearly 300 partner banks worldwide. In 2025 alone, ADB’s private sector operations supported $5.7 billion in trade transactions.
As a leading multilateral development bank, ADB plays a pivotal role in helping economies across Asia and the Pacific diversify trade both internationally and within the region, maximizing the development impact of global commerce.
Founded in 1966 and owned by 69 member countries, ADB is committed to fostering inclusive, resilient, and sustainable growth, leveraging innovative finance to transform lives, build quality infrastructure, and safeguard the planet. (AT Network)
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