Sustainable Trade Index 2023

Executive summary

In today’s ever-changing global economic landscape, we’re witnessing a shift from the era of rapid globalization to what’s commonly referred to as “slowbalization”. It is important to note that this shift doesn’t signal a retreat from international engagement; instead, it represents a deliberate and strategic response. This change is driven by a growing recognition of the intricate network of global interdependencies, as well as complex economic and geopolitical factors. The disruptions caused by the COVID-19 pandemic, combined with geopolitical turbulence, have prompted a fundamental reevaluation. Both multinational corporations and governments are grappling with the age-old dilemma of balancing efficiency and resilience in their operational strategies, diversification objectives, and national security considerations. Consequently, we’re observing a global trend toward legislative initiatives aimed at strengthening domestic industries, particularly in critical sectors such as renewable energy and semiconductors. These policy shifts extend far beyond national borders, significantly shaping the global economic landscape and influencing international relations. At the core of this transformation lies a crucial question: how will this evolving, more fragmented approach to global integration impact the two vital aspects of global trade and sustainable practices? The Hinrich IMD Sustainable Trade Index (STI) assesses these issues. The STI is a comprehensive tool that meticulously measures the capacity of 30 diverse economies to align global trade imperatives with long-term objectives encompassing economic growth, societal well-being, and environmental stewardship. This evaluation encompasses a comprehensive array of 71 indicators grouped into three core pillars. The economic pillar measures an economy’s ability to ensure and promote economic growth through international trade, the societal pillar captures social factors, like human capital development, that contribute to an economy’s capacity to trade over the long terms, and the environmental pillar measures how an economy uses its natural resources and manages the externalities of its economic activity. Examining the 2023 STI rankings, we find New Zealand maintaining its top position, closely followed by the United Kingdom in second place. Singapore has advanced two positions to secure third place, while Hong Kong has slipped one rank to fourth. Australia has impressively climbed to fifth place.

HINRICH-IMD SUSTAINABLE TRADE INDEX 2023

5