Towards Net Zero export credit: current approaches and next steps

Blavatnik School working paper
Andreas Klasen
Norman Ebner
Bianca Krämer
Anastasia Kantzelis
Abstract

BSG-WP-2021/042

As the world economy rapidly decarbonises to meet global climate goals, the export credit sector must keep pace. Countries representing over two-thirds of global GDP have now set net zero targets, as have hundreds of private financial institutions. Public and private initiatives are now working to develop new standards and methodologies for shifting investment portfolios to decarbonisation pathways based on science.

However, export credit agencies (ECAs) are only at the beginning stages of this seismic transformation. On the one hand, the net zero transition creates risks to existing business models and clients for the many ECAs, while on the other, it creates a significant opportunity for ECAs to refocus their support to help countries and trade partners meet their climate targets. ECAs can best take advantage of this transition, and minimise its risks, by setting net zero targets and adopting credible plans to decarbonise their portfolios. Collaboration across the sector can be a powerful tool for advancing this goal.

"Export credit agencies are increasingly conspicuous by their absence. With mandates to grow trade in order to create jobs and support key industries, export credit agencies play critical roles in the global economy, particularly in capital-intensive sectors that are essential to the net zero transition" writes Mark Carney, UN Special Envoy on Climate Action and Finance, in the foreword to the paper.

About the authors

Dr Andreas Klasen is Professor of International Business and Director of the Institute for Trade and Innovation (IfTI) at Offenburg University, Germany, as well as Visiting Professor at Northumbria University, UK and Honorary Fellow at Durham University, UK. 

Dr Thomas Hale is Associate Professor of Global Public Policy at the Blavatnik School of Government. His research explores how we can manage transnational problems effectively and fairly. Dr Hale leads the Oxford COVID-19 Government Response Tracker. 

Dr Norman Ebner is the lead Postdoctoral Research Associate (Economics) and Oxford Martin School fellow on the Future of Plastics programme at the University of Oxford. 

Bianca Krämer is a Research Assistant with the Institute for Trade and Innovation (IfTI) at Offenburg University, Germany, focusing on export strategies and climate finance. She is also undertaking a Master of Arts in Business Administration at Offenburg University, specialising in Controlling and Risk Management. 

Anastasia Kantzelis is an Australian lawyer, based in London as an Associate Member of 6 Pump Court Chambers, specialising in international environmental and natural resources law. Anastasia currently coordinates the Future of Climate Cooperation project, a joint research project launched by the ClimateWorks Foundation, the Blavatnik School of Government and Mission 2020.