New Zealand, UK And Australia Lead Global List Of Economies Engaging In Sustainable Trade Best Practices

22 OCTOBER 2024

New Zealand has topped the Hinrich-IMD Sustainable Trade Index (STI) 2024 for the third consecutive year, with the United Kingdom (UK) following in second place and Australia securing third. The Index measures how well trade contributes to mutually beneficial and balanced economic, social, and environmental outcomes among 30 trading economies.

New Zealand (first) retains its top spot for the third consecutive edition and leads the environmental dataset. The UK is second for the third edition in a row. However, it does perform worse than in 2023 in the economic dataset. Australia (third) has risen two positions since last year. Its greatest progress is in the environmental dataset.

Crucially, building “workforce resilience” is becoming a major goal of governments and the private sector worldwide, the report signals. This means having a healthy, educated, and unexploited workforce, which allows economies to better withstand shocks and seize emerging opportunities. "National resilience” and “environmental resilience” are also key concerns.

“Workforce resilience” is part of a broader trend to encourage “societal resilience,” the authors say. Societal resilience is the effect of investments that foster both economic and social stability. New Zealand, Canada, Australia, Taiwan, and Singapore do best here.

The Index is a joint project between the Hinrich Foundation and the International Institute for Management Development (IMD) and is in its third year.

It measures 30 economies, including members and applicants of major trade alliances, such as the Asia-Pacific Economic Cooperation (APEC), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Regional Comprehensive Economic Partnership (RCEP).

“The STI allows us to track how effectively trading economies are meeting the three pillars of sustainability: economic growth, societal advancement, and environmental stewardship. Achieving balanced outcomes between the three pillars is essential for resilience,” said Kathryn Dioth, CEO of the Hinrich Foundation.

“By investing in human capital, countries can build adaptable workforces capable of thriving amid economic fluctuations and global challenges,” said Christos Cabolis, Chief Economist of the IMD World Competitiveness Center, which led the research for IMD.

Other major findings include:
· Global trade is increasingly shaped by protectionist regulations, where economies favor policies that strengthen domestic industries and secure supply chains. This shift toward industrial policy, aimed at building economic resilience, marks a long-term trend, resulting in the fragmentation of the global trading system.
· Addressing climate resilience is complex because tackling climate change often requires regulatory interventions, whereas global trade flourishes with fewer barriers. The emergence of climate and trade agreements that promote trade in environmental goods and services could balance the dual objectives of open trade while addressing climate change.
· A few mid-ranking economies have shown consistent progress or stability over the last three years (2022-2024). Amongst them, Thailand gained three spots in the STI from 2022 to reach 12th place this year, Vietnam recorded a six-place rise, and Chile held a steady position at 11th across the three years.

The Index measures 72 data points, categorized into three “pillars”: economic, societal, and environmental, considered by the researchers to be the main axes of sustainable trade. They represent economic growth, societal well-being, and environmental stewardship, respectively. A new indicator measuring universal health coverage (UHC) from the WHO’s Global Health Observatory (GHO) was introduced to the societal pillar in this edition.

Given the complex interplay between economic growth, societal well-being, and environmental stewardship within the global trade system, the STI report measures how economies perform across a holistic set of metrics across these three pillars.

Looking more specifically at New Zealand’s performance:

Values in parenthesis indicate change in ranking compared to 2023

About the Hinrich Foundation

The Hinrich Foundation is an Asia-based philanthropic organization that works to advance mutually beneficial and sustainable global trade. We believe sustainable global trade strengthens relationships between nations and improves people’s lives. We support original research and education programs that build understanding and leadership in global trade. Our approach is independent, fact-based, and objective. We are an authoritative source of knowledge, sharp analysis, and fresh thinking for policymakers, business, media, and scholars engaged in global trade.

About the International Institute for Management Development (IMD)

IMD has been a pioneering force in developing leaders and organizations that contribute to a more prosperous, sustainable, and inclusive world for more than 75 years. Led by an expert and diverse faculty, with campuses in Lausanne and Singapore as well as a Management Development Hub in Shenzhen, IMD strives to be the trusted learning partner of choice for ambitious individuals and organizations worldwide. Our executive education and degree programs are consistently ranked among the world’s best. This consistency at the forefront of its industry is grounded in IMD’s unique approach to creating “Real Learning. Real Impact.” Through our award-winning research, programs, and advisory work, we enable business leaders to find new and better solutions, challenging what is and inspiring what could be. To learn more, visit www.imd.org.

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