Traders Magazine spoke with Duncan Higgins, Founder & CEO at Sustainable Trading, who won Instinet Positive Change: Sustainability at the 2024 Markets Choice Awards.
Please tell us about Sustainable Trading and your role in the industry?
Sustainable Trading is a non-profit membership network working with firms from all parts of the industry to help them make their businesses greener and more socially responsible. There is increasing demand from clients, employees and policymakers to demonstrate sustainability measures, and it often just makes good business sense. Our members are responding to these demands, sharing insights and expertise to help the industry improve and learning from the experience of others.
What does it mean to trade sustainably?
There are a few different ways of looking at this. You could focus on trading green companies, or you could make markets in ESG ETFs. Those elements are closely aligned to sustainable investment which already has a huge focus within the finance industry. The industry could also work on creating the perfect measurement for the carbon footprint of a trade, but that’s extremely challenging and a long way off.
We focus on the business operations of trading organisations – the people, process, and technology involved – and consider the environmental, social and governance challenges associated with each. The experience and expertise of our members are shared to identify specific practical changes that firms can implement to improve sustainability within their trading business.
What trends do you see around sustainable trading?
One of the most important trends is a developing awareness of the need for trading businesses to become more sustainable. When I began speaking to people about sustainability and trading it was often the first time they had considered it for our industry. That has most definitely changed, and I’d like to think Sustainable Trading and our members have had some impact and influence here.
Why is it important for trading firms to try to be sustainable?
Putting aside the fact that it’s the right thing to do, it also makes business sense. Identifying efficiencies that reduce energy use translates over time into lower costs. Making more thoughtful travel choices is an opportunity to reduce T&E expenditure. Evidence shows that more diverse teams make better business decisions.
If your clients care about this subject, at some point you’ll need to care about it too and be able to show them how you’re making progress. Employees are becoming more discerning about the type of company they want to work for. Lastly, changes made within a trading business will contribute to corporate sustainability objectives and better align the trading unit with the goals of the wider organisation.
How should trading firms integrate Sustainability and ESG in their business strategies?
Many firms already focus on sustainability at a corporate level. When considering how a trading business should integrate sustainability, it’s more about specific industry challenges like widespread use of high-performance technology, longstanding diversity challenges, and impacts on employee physical and mental wellbeing. It also makes sense to think about the actions that can be taken – like advocating for positive change, implementing new practices and being transparent with stakeholders about sustainability progress.
Please tell us about Sustainable Trading’s recent developments and achievements.
Although a relatively new organisation, we’ve achieved a lot in a short timeframe. We’ve doubled our membership since 2022, and also significantly increased the diversity of member firm representation. Member firms from 3 continents represent all asset classes and parts of the trading ecosystem – banks, venues, asset managers, technology and data service providers (including data centres).
The first phase of our work, completed last year, was the development of an initial set of best practices on six areas of sustainability that are important to the trading industry. We also delivered an associated measurement framework to guide next steps and track and communicate progress.
This year, we’re working with members to support the implementation of these new practices.
What can we expect from Sustainable Trading in the near future?
We’re currently putting the finishing touches to a new approach that will provide our members with a gradual and straightforward framework to incrementally progress. This will give them a new way to focus on their contribution to our work, implement new practices, and engage with others from across the trading industry.
