SWIFT and ICC collaborate to drive sustainability in trade finance

SWIFT announces today that its KYC Registry will become the first global utility to integrate the International Chamber of Commerce’s (ICC) Sustainable Trade Finance Guidelines, making it easier for financial institutions to identify environmental, social and governance (ESG) risks in their supply chains.

By integrating the ICC’s ‘Sustainable Trade Criteria: Customer Due Diligence Guidelines’ into SWIFT’s KYC Registry, which has more than 6,000 users, financial institutions will benefit from enhanced transparency and will be able to assess the sustainability of their customers’ trade business more accurately.

Corporates with multiple banking partners will no longer have to provide ESG information in differing formats through bilateral exchanges, which is costly, time-consuming and inefficient. Instead, the inclusion of the ICC’s guidelines on SWIFT’s KYC Registry provides an industry standard that means corporates will only need to complete and update a single form that they can then share with their banking partners.

Bart Claeys, Head of Data and Analytics Products Strategy at SWIFT, said, “Never before have environmental and sustainability practices had a more significant bearing on the financial decisions made by consumers, investors, corporates and financial institutions alike. This has led to a huge increase in demand for ESG due diligence which has, due to a lack of standardisation, been difficult to provide. By integrating the ICC’s Sustainable Trade Finance Guidelines into our KYC Registry, SWIFT has made it much easier, promoting transparency and helping to drive sustainability in trade finance.”

Andrew Wilson, Permanent Observer to the United Nations at ICC, said, “The integration of the ICC Sustainable Trade Finance Guidelines into SWIFT’s KYC Registry is a great show of progress towards embedding sustainability in trade finance transactions. We are delighted to have been able to partner with SWIFT to mainstream ESG considerations into customer due diligence processes. Enabling alignment of financing with global sustainability objectives is a top-order priority for ICC – not least in light of lessons learned from the COVID-19 crisis.”

Nigel Beck, ‎Global Head of Sustainable Finance & ESG Advisory at Standard Bank Group, said, “The integration of the ICC’s Customer Due Diligence Guidelines into SWIFT’s KYC Registry is testament to the ongoing work by the ICC Sustainable Trade Finance working group. This first step is a critical success in practically demonstrating the growing importance and focus placed on sustainable finance globally.”

Roberto Leva, Relationship Manager at Asia Development Bank’s Trade and Supply Chain Program and Co-head of ICC Sustainable Trade Finance Working Group, said, “The collaboration with the SWIFT KYC Registry has created a new industry standard for the collection of KYC and ESG information. This allows the banking industry to stay ahead of the curve by showing a proactive approach on a topic such as sustainability, which is due to receive more and more attention in the years to come.”

Established in 2014, SWIFT’s KYC Registry is a secure global platform which helps standardise and streamline the due diligence process. To date, more than 6,000 institutions are using the KYC Registry to both publish their KYC data and receive information from their correspondents. The Registry was extended to SWIFT’s corporate customers in late 2019 to help simplify the KYC process between banks and corporates.

The Customer Due Diligence Guidelines were developed by the ICC Banking Commission’s Working Group on Sustainable Trade Finance after extensive consultation with its members as well as selected National Committees, and validation by the Executive Committee. The ICC’s due diligence guidelines cover several key areas including sustainability commitments, capacity and track record, supply chain practices and commodities.