The shift towards the digital exchange of trade data and documents can improve efficiency, reduce costs, enhance transparency, and enable better accessibility to and analysis of data. Furthermore, it has the potential to foster greener and more inclusive trade. Yet, efforts to digitalize data and documents are currently fragmented, focusing on specific modes or parts of the supply chain, which poses significant challenges for interoperability and, ultimately for access to markets, exports enhancement and sustainable development.
At the same time, as supply chain due diligence regulations are gaining traction, particularly in major consumer markets, such as the European Union (EU), importers are facing mounting pressure to provide verifiable sustainability data encompassing their entire supply chains, not solely the final products.
In response, UNECE is working to scale transparent supply chain tracing to meet sustainability goals and to strengthen the digital connectivity of transport corridors to support regional and global economic integration. These areas of work are focus of this week's UNECE Sustainable and Digital Trade Facilitation Week, which features the 42nd UN Centre for Trade Facilitation and Electronic Business (UN/CEFACT) Forum (8 – 10 July) and the 30th UN/CEFACT Plenary (11-12 July).
“Current global challenges require that we constantly explore innovative and digital solutions to address trade disruptions, and drive sustained and inclusive progress,” noted UNECE Executive Secretary Tatiana Molcean, opening the UNECE Sustainable and Digital Trade Facilitation Week in Geneva. “By adopting UNECE digital tools, we can streamline cross-border transactions, improve the efficiency of customs procedures, and foster more resilient and ethical global trade.”
Vincenzo Grassi, Ambassador and Permanent Representative of Italy to the International Organizations in Geneva, underlined that digital tools and standards developed by UNECE regulate information about the origin of materials and products and their compliance with sustainability requirements. “They facilitate real-time sharing and storing of reliable, up-to-date information, supporting the analysis of large data volumes for improved risk and operations management. To support the discussions of these issues, the Government of Italy will host the 43rd UN/CEFACT Forum in Rome on 10-12 December 2024.”
Fostering responsible consumption and production choices
In the past two decades, there has been a rising demand from consumers, capital markets, and regulators for enhanced sustainability in products and processes, coupled with transparent corporate reporting on sustainability. This shift impacts consumer preferences, business practices, capital access, and regulatory measures, like for example, the EU due diligence, corporate sustainability reporting, green claims, and deforestation legislations, which now carry significant impacts on businesses.
At the same time, according to a report on greenwashing by the European Commission from 2021, 59% of environmental claims had no evidence and 42% were deemed false or deceptive.
With increased scrutiny on verifiable sustainability claims and the risk of greenwashing, credible evidence and disclosures are essential. Value chain transparency, supported by high-integrity data, incentivizes companies to meet higher sustainability standards. To enable more responsible consumption and production choices, and promote circular business models, UNECE has recently outlined recommendations and standards that can support the development of digital product passports, which can inform consumers and businesses about products, materials, the conditions under which they are produced and their sustainability performance.
UNECE is currently finalizing its new Recommendation No. 49 “Transparency at Scale,” which will introduce the United Nations Transparency Protocol (UNTP) to establish a means by which to share critical information across global supply chains in a manner that is accessible to all. This recommendation is discussed at both the 42nd UN/CEFACT Forum, the 4th working meeting of the UNECE's Team of Specialists on Environmental, Social and Governance (ESG) Traceability of Sustainable Value Chains in the Circular Economy, as well as the 30th UN/CEFACT Plenary, with its adoption planned for 2025.
The most important aspect of the UNTP is its scalability and accessibility to businesses of all sizes and technical capabilities thanks to the use of a detailed suite of technical specifications. As such, it provides a framework that can be implemented with minimal barriers to entry, and it represents a bold step forward in the journey towards a more transparent, equitable, and sustainable global economy.
Digital connectivity of transit corridors to promote sustainable growth
Due to disruptions of supply chains, export control regimes became more complex, costly and uncertain, creating risks to global trade processes. Economic operators face greater reporting and documentation requirements, changing lists of controlled goods, sanctions, and varying permit procedures. Another important focus of UNECE’s work is the digital connectivity of transit corridors.
Reducing trade costs is crucial for enabling economies to effectively participate in regional and global value chains and promote growth and sustainable development. For example, the adoption of digital trade facilitation measures, such as the seamless electronic exchange of trade data and documents across borders, has the potential to significantly reduce trade costs by more than 15% in participating States of the United Nations Special Programme for the Economies of Central Asia (SPECA), which includes Afghanistan, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.
UNECE is working to strengthen the digital connectivity of transit corridors through use of its information exchange standards, such as Single Window, UN/EDIFACT, and UN/LOCODE, which ensure uniform and seamless electronic data exchange in the trade, transport and logistics sectors, thus significantly reducing the cost, speed, and error of information exchange.
Importantly, UNECE standards underpin the digitalization of data and document exchange along the Trans-Caspian Transport Corridor in Central Asia and the European Union Single Window Environment for Customs, and can be relevant in other regions of the world.