ITFC Launches Environmental and Social Policy to Advance Sustainable Trade Finance

The ES policy launch highlights ITFC’s leadership in integrating environmental and social considerations into global trade finance.

The International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank Group (IsDB), has unveiled a groundbreaking Environmental and Social (ES) policy, solidifying its commitment to embedding sustainability across its operations. This policy acknowledges the crucial role of trade finance in addressing climate change and fostering social equity while aligning ITFC’s efforts with international frameworks such as the Paris Agreement and the United Nations Sustainable Development Goals (SDGs).

Tackling Climate Vulnerability in Member Countries

ITFC's member countries, many of which are among the most climate-vulnerable globally, face interconnected challenges of environmental degradation, social inequality, and economic instability. With trade accounting for 20-30% of global CO₂ emissions, the ES policy is designed to drive green transformation in trade practices, ensuring climate-resilient economic growth for member nations.

Highlighting the urgent need for action, ITFC CEO Eng. Hani Salem Sonbol emphasized, “Our work in some of the world's most climate-vulnerable regions has given us firsthand insight into the accelerating impacts of climate change. From rural landscapes to urban centers, these challenges reinforce our commitment to powering sustainable growth and aligning with international sustainability goals.”

Key Pillars of the Environmental and Social Policy

The new ES policy is built on five core pillars that underscore ITFC’s vision for fostering sustainable trade finance:

1. Environmental Action ITFC prioritizes sustainability in its internal and external operations by incorporating digitization, paperless solutions, and energy-efficient practices. By leading with green initiatives, ITFC aims to set an example for trade finance institutions globally.

2. Sustainable and Inclusive Trade Finance ITFC is increasing its share of financing in sectors that promote resilience and sustainability, including eco-friendly supply chains, sustainable agriculture, and financial inclusion. These efforts aim to bolster economic stability and reduce vulnerabilities across member countries.

3. Empowering for Sustainable Impact Through capacity-building programs and technical assistance, ITFC supports businesses and governments in mitigating climate risks, advancing social equity, and accessing green financing opportunities.

4. Innovative Treasury Solutions ITFC is investing in Shariah-compliant financial instruments, with plans to explore the issuance of green Sukuk to finance climate-resilient trade and development projects. These innovative solutions aim to align Islamic finance with global sustainability objectives.

5. Credible Assessment and Disclosure Adopting international best practices, ITFC commits to transparently assessing and disclosing the environmental and social impacts of its projects. This approach promotes accountability, trust, and stakeholder engagement.

Strengthening Intra-OIC Trade and Green Energy Solutions

As part of its broader mission, ITFC is actively fostering intra-OIC (Organization of Islamic Cooperation) trade while enhancing the capacities of member countries to adopt green energy solutions. This vision aligns with ITFC’s overarching goal of facilitating inclusive and sustainable economic growth.

Amplified Commitment to Climate Resilience

The ES policy launch highlights ITFC’s leadership in integrating environmental and social considerations into global trade finance. ITFC is now positioned to set a new benchmark for trade finance institutions, ensuring economic growth that is not only sustainable but also equitable.

In addition to its ES initiatives, ITFC plans to expand its collaboration with regional and global partners, mobilizing resources for climate-resilient projects and developing innovative solutions tailored to the specific needs of its member countries.

This transformative policy underscores ITFC’s dedication to leveraging trade finance as a tool for combating climate change, reducing social inequalities, and driving sustainable development worldwide.