UN Report: What is the Future of Sustainable Trade?

The international trade market has been linked with multiple sustainability issues including deforestation, climate change and human rights violations.

The United Nations (UN) has released its 2024 ‘Future of Sustainable Trade’ (FOST) report, outlining how international trade can stay on the path to sustainable development.

The main goals of the FOST report are to map the regulatory landscape of sustainability due diligence and its connection with Voluntary Sustainability Standards (VSS), draw insights from VSS to guide due diligence implementation, assess the impact of sustainability due diligence on producers in developing countries and recommend ways to make sustainable trade governance more inclusive.

What’s in the FOST report?

In its first five bi-annual reports, the United Nations Forum on Sustainability Standards (UNFSS) listed developments in the realm of VSS as primarily private. 

These VSSes have emerged to promote sustainable practices across and within global value chains (GVC), particularly in land-use sectors.

The UN’s FOST report underscores the importance of integrating sustainability into trade practices whilst addressing the economic and social challenges faced by developing countries by stating the following:

Transition from voluntary to regulatory governance:

• A global shift is occurring from VSS to mandatory regulatory approaches, such as due diligence legislation
• These measures aim to ensure sustainability across GVCs, addressing issues like deforestation, human rights and climate change

Role of VSSes:

• VSSes integrate international conventions like the International Labour Organisation (ILO) and biodiversity treaties into their frameworks
• They act as tools to align with emerging regulations by offering infrastructure for compliance, for example: audits, traceability and grievance mechanisms
• VSSes currently face gaps in fully aligning with new mandatory requirements  – risking redundancy without adaptation

Potential impacts on developing countries:

• Compliance costs, exclusionary effects and risks of marginalising smallholders, indigenous peoples and informal workers
• High regulatory demands may divert trade or lead to market segregation, disproportionately impacting vulnerable economies

European Deforestation-free Products Regulation (EUDR):

• Targets deforestation-linked commodities like cocoa, coffee and palm oil
• Requires geolocation and traceability data  – challenging for many small producers in regions like Peru
• Risks include exclusion of non-compliant producers and preference for certified suppliers, enhancing inequalities

Ways to conduct sustainable trade

The FOST report highlights many different solutions for multiple emerging issues. 

The report states that by supporting small producers and high-risk regions, compliance requirements can be met and ensured that they are not excluded from global markets.

The supporting of small producers and high-risk regions through capacity building is essential to help them meet compliance requirements and avoid exclusion from global markets. 

“Without the means to invest in sustainable development and transform their energy and food systems, developing countries are falling even further behind," United Nations Secretary-General António Guterres said.

“A two-track world of haves and have-nots holds clear and obvious dangers for every country. We urgently need to rebuild global cooperation and find the solutions to our current crises in multilateral action.”

The report emphasises that aligning VSSes with due diligence measures fosters coherence and prevents fragmentation, whilst ensuring fair value distribution, promoting inclusivity and equitable sharing of costs and benefits across GVCs – particularly for developing regions. 

Increasing stakeholder involvement by engaging actors from developing countries in standard-setting and regulatory processes enhances representation and ensures policies address diverse needs effectively.

To reduce barriers for vulnerable groups, phased compliance and regional adaptations provide flexibility, making regulations more inclusive and practical. 

Technological and collaborative innovations, such as blockchain-based traceability systems, are critical for transparency, compliance and multi-stakeholder approaches to help address systemic barriers and foster global sustainability goals. 

Regulations must combine strict sustainability standards with practical support to prevent market exclusion and maximise positive impacts on biodiversity, the climate and human rights. 

Trade, environment and sustainability

The UN works with governments to ensure that green and blue economies are built, emphasising that trade is part of the solution for the climate crisis. 

The UN says that the ocean, covering more than two-thirds of the Earth's surface, plays a vital role in sustaining life by providing resources, regulating climate and facilitating 80% of global trade. 

The United Nations Conference on Trade and Development (UNCTAD) supports developing countries by identifying opportunities in the global ocean economy, assisting in creating policies and strategies to promote sustainable ocean sectors via: 

• Conservation
• Sustainable use
• Fisheries subsidies
• Addressing marine litter and plastic pollution.

Since 2015, the UN has emphasised the importance of a circular economy that focuses on reusing products and minimising waste, ensuring materials like clothes, scrap metal and electronics are efficiently returned to the economy rather than discarded. 

This approach not only protects the environment but also optimises resource use, fosters innovation, creates jobs and develops new economic capabilities.

UNCTAD promotes circularity by exploring waste-to-value opportunities, supporting innovative business models, fostering consumer education and encouraging collaborative economy sectors. 

Biodiversity is another critical sector for a sustainable economy, offering opportunities for economic development and improved livelihoods through the sustainable use and trade of biodiversity-derived products and services. 

To support this, UNCTAD launched the BioTrade Initiative in 1996 to advance the objectives of the Convention on Biological Diversity (CBD).

BioTrade refers to the commercialisation and trade of products or services sourced from biodiversity in ways that respect people and nature. 

Guided by the BioTrade Principles and Criteria, UNCTAD provides a framework for businesses, governments and civil society to conserve biodiversity, ensure sustainable use and equitably share trade benefits. 

The FOST report emphasises the need for a comprehensive and inclusive approach to address sustainability challenges in international trade.

The report concludes that sustainable trade is not just a necessity but an opportunity—one that requires international cooperation, balanced regulations and strategic investments to ensure that trade contributes positively to the environment, economies and livelihoods worldwide.

Explore the latest edition of Sustainability Magazine and be part of the conversation at our global conference series, Sustainability LIVE. 

Discover all our upcoming events and secure your tickets today.

Sustainability Magazine is a BizClik brand