SINGAPORE - Singapore is rated fifth in the world when it comes to sustainable trade, which covers economic, societal and environmental aspects, according to a report released on Tuesday.

The report, known as the Sustainable Trade Index, ranks 30 economies by their capacity for global trade in a manner that supports long-term sustainable development.

The rankings are based on factors that affect the sustainability of trade in a time of high political tensions and inflation. They include economic growth, social capital development and environmental protection.

New Zealand tops the index, followed by Britain and Hong Kong.

The report was produced by the Institute for Management Development (IMD) Switzerland, an academic institution, and the philanthropic Hinrich Foundation.

Amid the ongoing United Nations Climate Change Conference (COP27) in Egypt, the index is a reminder to countries that the sustainability of trade is essential for economies to prosper at a time when higher climate accountability is expected of nations, wrote the two organisations in a press statement released on Tuesday.

The index looks at 70 indicators across three pillars. The economic pillar quantifies how well economies are fostering economic growth through international trade, such as the quality of trade infrastructure and the ease of conducting international trade.

The societal pillar captures social factors contributing to the economies’ long-term capacity to conduct trade, such as educational levels and labour standards, which feed human capital development.

The environmental pillar measures the extent to which a country uses natural resources and manages externalities arising from its economic growth and participation in the global trading system, such as air and water pollution levels.

Singapore came in second in the economic pillar, ninth in the social pillar and 10th in the environmental pillar.

In particular, the Republic is ranked on the index as having the lowest level of trade costs as it has effectively reduced system inefficiencies such as lengthy Customs procedures, opaque legal system and corruption, according to the index report.

Of the economies ranked, it has the second most accessible regime for trade openness, which takes into account factors such as the number of regional trade agreements in force.

The Republic also ranked second in exchange rate stability, which also strengthens the Singapore trading system.

On the other hand, Singapore has a shrinking labour force, and came in 24th in labour force growth. It also has limited fixed capital formation, ranking 18th in gross fixed capital formation as a percentage of gross domestic product.

The index found that the top-ranking economies encourage technological innovation and have low trade barriers. Their citizens have a high life expectancy, attend school for longer and enjoy more growth opportunities. They conserve energy and respect climate goals globally.

But the ranking also found that among developed economies, merchandise imports may be exposed to the risk of modern slavery. While New Zealand, among the world’s larger economies, dodged this rising problem, Japan was 27th, China 30th, and the United States 18th in this indicator.

Japan, which ranked fourth overall in the index, performed poorer in the ecological footprint indicator, coming in 20th. Britain and Japan also ranked lower for the renewable energy indicator – Britain was 17th, and Japan 22nd.

Professor Arturo Bris, director of the IMD World Competitiveness Centre at IMD Switzerland, said: “Globalisation and sustainability are at odds with each other. Companies and countries have used global trade and sourcing to maximise financial returns, but we are now acutely aware that this compromises sustainability...

“Governments and corporate leaders alike must balance these two effects.”