Green Trade Transition
Policies and Financial Measures to
Encourage Sustainable Agri-Food Trade
Current Status and Scope of Impact
Why should sustainable agricultural trade be incentivized?
The global agri-food system, in its expansion to feed the world, fuels significant sustainability challenges, including carbon emissions, biodiversity loss, land/labor right issues, and inequitable resources for smallholders
70%+
In the food sector, more than 70% of total emissions originate from agricultural land-use change and deforestation.1
40%-50%
Soy, beet, and palm oil together account for 40-50% of global land-use change.
driving significant carbon leakage2
Soy
5%-14%
Beef
17%-34%
Palm oil
8%
total emissions originate from agricultural land-use change and deforestation (LUC emissions)
1 World Economic Forum (2022). White Paper: Curbing Global Deforestation—China's Actions and Opportunities
2 Global Forest Watch, Poore & Nemecek (2018)
Over the past 50 years,
human activities such as agricultural production
have reduced the Amazon's tropical rainforest
area by at least
17%
In Brazil's Amazon and Cerrado regions,
livestock production is a major driver of
deforestation.
Social sustainability issues such as land and labor rights, and resource
constraints faced by smallholder farmers, which in turn challenge biodiversity
conservation efforts.
The sustainable transformation of global agricultural supply chains is critical for climate change mitigation and biodiversity conservation
Vital role of China
Driving sustainable transformation and addressing environmental and social challenges
With regulations like the EU Deforestation Regulation (EUDR), Chinese companies face compliance pressures for mandatory supply chain traceability and due diligence. Policy incentives and financial support are critical to enable their transition to sustainable supply chains
Soy
Primarily imported, from
Brazil & US
70%
Malaysia
26%
Palm oil
Almost entirely sourced from imports, from
Indonesia
68%
Beef
Primarily imported, sourced from South America
Including Brazil, Argentina, Uruguay
75%
Chinese companies are increasingly facing compliance pressures from regulations such as the EU Deforestation Regulation (EUDR)
Supply chain traceability
Sustainable verification
Under compliance requirements, Chinese enterprises need policy and financial support to shift toward sustainable supply chains.
Reflecting the broader momentum of China's expanding green finance agenda
Institutional opportunities
As China's green finance architecture expands toward the trade and consumption sectors, it opens institutional opportunities for promoting sustainability in agricultural commodity trade.
A just transition
China should promote the establishment of new business models and standard systems, such as embedding sustainable principles in bilateral trade, sharing green development concepts and governance models, and continuously facilitating the reduction of green transition costs while ensuring a just transition
Opportunity
What dividends can be unlocked by driving sustainable transition of agri-food trade?
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For FIs

Reduce risk exposure
Making financing decisions that can future-proof your portfolio in agri-food

Innovation accelerates growth
Develop innovative supply chain and green trade finance tools to support and incentivize green production at the origin of the value chain

For companies

Unlock sustainable financial incentives
Strengthen supply chain traceability and unlock preferential financing

Potential KPIs for Sustainability-Linked Bonds (SLLs) Sustainability-Linked deforestation-free commodities, and the proportion of raw materials sourced in line with NDPE principles(No Deforestation,No Peat, No Exploitation).

Unlock policy dividend
Obtain agricultural commodity certifications to qualify for green finance incentives

2025 Green Finance Support Project Catalogue: the scope of ‘green-certified products’ includes: organic product certification, green food certifications, energy-/water-saving certification, eco-labelled products, sustainable forest certification, and more

For government and regulatory bodies

Deepen global impact
Driven by emerging international trade regulations, China can accelerate the development of mutually recognized regional certification standards and enhance its influence in agricultural commodity trade

Accelerate green growth
Drive the green transition of the agri-food sector by aligning the industrial chain through standardization and incentive measures, catalyze new growth drivers from green trade to consumption.

Action
Build a green value chain for sustainable agri-food trade, the moment is now
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For FIs

future-proof investment portfolio by


Establishing end-to-end risk management systems and conducting upstream supply chain due diligence for financed projects

Developing innovative products and scaling financing channels

For government and regulatory bodies

boost green agri-food product market momentum by




Advancing the trade standards and promoting their mutual recognition

Implementing green finance provisions to support agricultural supply chains

For companies

unlock policy, financing and market dividends by



Diversifying sourcing channels and establishing partnerships with suppliers possessing sustainable certifications and transparent data.

Leveraging digital platforms and strengthening internal governance through tiered supplier management and oversight

Building internal capacity to stay abreast of compliance requirements and financial incentives

Challenge
What's holding back?1
Tracking
Confronted with complexity of supply chain and barriers of oversight, Chinese companies face disparities in traceability capabilities and international certification standards. Establishing comprehensive supply chain traceability systems and fulfilling due diligence obligations remain challenging.
Standardizing
Industry sustainability standards and criteria, for agricultural products are yet to be refined and unified, as well as information disclosure system regarding environmental impact of agri-food supply chain.
Underfunding
Higher costs for low-risk commodities and financing gaps in critical areas like biodiversity conservation.
Capacity gaps of SMEs
SMEs in China Struggle with limited expertise, inadequate technical tools, and resource constraints, impeding systematic supply chain traceability
1Based on multi-stakeholder consultations (government, academia, industry, finance, CSOs) and research.
Opportunity
To overcome and scale up
Leveraging the dual advantages of policy frameworks and market scale, building on existing ESG frameworks in financial institutions, learning from international risk-management practices, and harnessing financial innovation and emerging technologies—along with strengthening international cooperation through multilateral platforms—can help overcome current challenges, drive the green trade transition, and address environmental and social issues in agricultural production.
Dual drivers of policy guidance
and market demand
Building upon the existing
ESG frameworks in FIs
Learning from international
FIs' risk management practices
Leveraging financial innovation
and emerging technologies
International cooperation and
multilateral platforms as a bridge

Providing a policy foundation and potential resources to address corporate challenges in establishing traceability systems and aligning with standards

Green finance and sustainable policy system
Policy guidance

As of the end of 2023

China's outstanding balance of RMB and foreign currency green loans exceeded
30 trillionyuan
The cumulative issuance scale of green bonds in China's domestic market reached approximately
3.62 trillionyuan
Source：IIGF, 2024
The 2025 Green Finance Supported Projects Catalog builds on prior bond and transition industry directories, now newly incorporating trade and consumption
Green trade policy incentives

In October 2025, the Ministry of Commerce released the Implementation Opinions on Expanding Green Trade.

The policy aims to 'Actively expanding green trade, promoting the optimization of trade, to achieve the carbon peaking and carbon neutrality goals, and accelerate the development of China as a leading trade player.

The world's largest trade market
Market demand
According to data from the WTO, China's total import and export value reached $5.94 trillion in 2023, remained the world's largest trader for 15 years
$5.94 trillion
As ESG and sustainable finance continue to develop and deepen in China, major financial institutions have established ESG risk management structures and dedicated teams
Leveraging existing internal systems within financial institutions — such as whitelist mechanisms and risk review processes — to help companies address capacity gaps in due diligence and standardization of disclosure, while also providing pathways for designing future financial incentives for sustainable agricultural products.
Leading international FIs (e.g., HSBC, Rabobank) have integrated "deforestation-free" commitments into investment decisions. Their practices in risk assessment, client due diligence, and post-investment monitoring can serve as references for Chinese FIs
Current innovation practices in sustainable agriculture, green credit, green bonds and blockchain-based digital traceability in China provide valuable experience for building transparent, efficient, and traceable agricultural supply chains.
Leading enterprises and FIs have pioneered pilot projects and partnerships:

Application of Blockchain

Alibaba and China National Materials Storage and Transportation Co., Ltd. have collaborated to digitize warehouse receipts for bulk commodities through the "AntChain" technology, enabling FIs to verify inventory authenticity in real-time and effectively address traceability challenges.

Acess to Sustainable Finance Incentives

From 2019 to 2022, COFCO International raised a total of $4.6 billion through three SLLs(sustainability-linked loans). These loans are tied to sustainable sourcing performance targets, such as enhancing the traceability of its Brazilian soybean supply chain, thereby improving the company's sustainable supply chain management performance.

Existing research and platform-building experience from research institutions, environmental organizations, and independent think tanks on forest-risk commodities, biodiversity conservation, and responsible investment can serve as a communication bridge for financial institutions, companies, and governments, enabling them to jointly develop cross-sector solutions for the transition toward sustainable agricultural products.
Pathway
Together, towards a transparent and sustainable future
Roadmap: Establish a traceable, transparent, and low-forest-risk agricultural commodity trading system, with policy guidance as the overarching framework, financial innovation as the driving force, and corporate practices as the key of implementation.
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Governments and regulatory bodies
Direction

Strengthen regulatory frameworks and international cooperation to enable standard alignment and market incentives.

Key actions

Establish a certification and traceability standard system for sustainable agricultural products, and promote international mutual recognition mechanisms.

Include agricultural product supply chains within the scope of green finance incentive policies.

Support cross-border and multilateral platforms in sustainable trade cooperation, and promote the implementation of regional demonstration projects.

FIs
Direction

Build on ESG risk frameworks and innovate financial tools to accelerate supply chain transformation.

Key actions

Integrate supply chain due diligence mechanisms throughout the entire loan process (pre-loan, in-loan, and post-loan), incorporating commitments for "deforestation-free" into investment and credit evaluations

Introduce innovative financial products, such as Sustainability-Linked Loans(SLLs), biodiversity funds, and specialized financing for small and medium-sized enterprises.

Companies
Direction

Strengthen procurement transparency and traceability to enhance supply chain resilience and competitiveness.

Key actions

Establish supply chain traceability systems and implement sustainable sourcing policies

Participate in international sustainability certification systems to enhance export and financing facilitation.

Take advantage of blockchain and digital platforms to improve data transparency and management efficiency.

Multi-stakeholder collaboration
Direction

Align policy, finance, and corporate actions to create a joint force.

Key actions

Build multi-stakeholder collaboration platforms to promote data sharing and capacity building.

Jointly develop demonstration projects to create replicable and scalable solutions.

Enhance influence on global issues through international exchanges and knowledge cooperation.

Together forward
building a transparent, traceable, and deforestation-free agrifood trade
system that benefits growth, people and planet.
Through systematic research and in-depth discussions jointly conducted with government agencies, financial institutions, and industry enterprises, we have collectively recognized that building a traceable, transparent, and low forest-risk agricultural trade system requires a collaborative framework driven by policy guidance, fueled by financial innovation, and grounded in corporate implementation.
Actionable resources
List of related China's financial policies
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Year of Release
Policy
Key points
2017
Guidance on Promoting Green Belt and
Promoting the development of green trade and strengthening green supply chain management.
2020
Green Finance Statistical System
Introducing the concept of Green Trade Finance for the first time.
2021
Green Bond Principles
Identified Sustainable Agriculture and Sustainable Livestock Farming as eligible green project categories for green bond financing.
2021
Green Bond Endorsed Projects Catalogue (2021 Edition)
Support bulk green agricultural products as commodities certified under internationally recognized sustainability standards.
2022
Implementation Plan for Promoting Green Consumption
Supports banking and insurance institutions in developing green consumption financial services.
Promotes the development of green business in consumer finance companies
Provides financial services to enterprises and individuals involved in the production, distribution, and purchase of green and low-carbon products.
2023
China-ASEAN Green Agriculture Action Plan (2023-2027)
Proposes deepening the formulation and mutual recognition of international standards related to the import and export of green agricultural products.
Establishes trade channels for green agricultural products.
Establishes a stable and unimpeded trade corridor for green agricultural products between China and ASEAN.
2024
Low-Carbon Transition Catalogue (2024 Edition)
Encouraging financial institutions to provide financial support for both domestic and overseas projects, including certified Green Agriculture Product.
2025
Green Finance Supported Projects Catalogue (2025 Edition)
For the first time, it extends policy reach to cover both trade and consumption sectors based on the 2024 Low-Carbon Transition Catalogue and the 2021 Green Bond Endorsed Project Catalogue.
Overview of environmental risk management policies for commodity financing by International FIs
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FIs
Forest risk related policies
Covered sector / commodities
Standard Chartered
Agribusiness Position Statement
Forestry, palm oil, and soy
Barclays
Forestry & Agricultural Commodities Statement
Soy, beef, palm oil, and timber
HSBC
Agricultural Commodities Policy
Forestry Policy
Palm oil, soy, cattle ranching, and rubberwood
Timber product
Societe Generale
Industrial agriculture and forestry sector policy
Palm oil, beef, and soy
Rabobank
Deforestation and Land Conversion Policy
Palm oil, soy, timber(also addresses sugarcane, cocoa, coffee, tea, and cotton)
BNP Paribas
Sector Policy - Palm Oil
Sector Policy - Agriculture
Palm oil
Soy and beef(as a separate sector from other agricultural products)
Certification schemes (non-exhaustive list)
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Category of Commodities
Certification / Standards
Initiated by
Palm oil
Roundtable on Sustainable Palm Oil(RSPO)
（Jointly initiated by）NGOs
Palm Oil Innovation Group(POIG)
（Jointly initiated by）multiple stakeholders
Sustainable Agriculture Network (SAN)
SAN (an international network of NGOs）
Roundtable on Sustainable Biomaterials(RSB)
（Jointly initiated by）NGOs
Malaysian Sustainable Palm Oil (MSPO)
Malaysian Sustainable Palm Oil (MSPO) Certification Committee (government-owned NGO)
Indonesia Sustainable Palm Oil(ISPO)
Ministry of Agriculture of the Republic of Indonesia
International Sustainability and Carbon Certification(ISCC)
（Jointly initiated by） multiple stakeholders
Rainforest Alliance(RA)
RA（environmental civil society）
Soy
Round Table on Responsible Soy Association (RTRS)
（Jointly initiated by） multiple stakeholders
ProTerra
ProTerra Foundation (NGO)
FEFAC Soy Sourcing Guidelines
European Feed Manufacturers' Federation(industry association)
International Sustainability and Carbon Certification(ISCC)
（Jointly initiated by） multiple stakeholders
Cattle
Global Roundtable for Sustainable Beef(GRSB)
（Jointly initiated by） corporates
RA-SA(Rainforest Alliance Sustainable Agriculture)
RA（environmental civil society）
Beef on Track BoT
Initiated by NGO
Organization Profile
Global Environmental Institute (GEl) is a Chinese non-governmental, non-profit organization founded in Beijing in 2004. It is committed to addressing environmental challenges through market mechanisms and policy innovation, aiming to achieve social, environmental, and economic benefits.
Project Introduction
To address the environmental challenges posed by global agri-food trade, GEl actively promotes the joint development of sustainable agricultural supply chains between China and its trading partners through multiple international cooperation projects. The projects focus on establishing effective policy guidance and financial incentive mechanisms at the China market end, supporting trade and market access for green agricultural products.