The United Kingdom has retained first place, while Singapore rose two places to second and New Zealand moved to third. Hong Kong SAR and Australia complete the top five. The UK remains the only economy in this year’s Index to perform consistently near the top across the economic, societal, and environmental dimensions.
After several years of pandemic disruption and supply-chain shocks, movement in the overall ranking was limited this year. No economy moved more than four places, suggesting that sustainable trade performance is increasingly reflecting underlying capacity rather than short-term circumstances.
Produced jointly by the IMD World Competitiveness Center and the Hinrich Foundation, the Index assesses 30 economies across economic, societal, and environmental dimensions. This year, five years of comparable data make it possible to look beyond a single ranking and examine how those dimensions are changing over time.
Trade agreements only go so far
The 2026 Index, themed Pathways to resilience: Lessons from CPTPP, RCEP, APEC, and DEPA, examines how economies perform within some of the world’s major trade groupings.
A key finding is that membership alone does not produce sustainable trade performance.
Seven economies belong simultaneously to CPTPP, RCEP, and APEC. Most rank in the upper half of the Index, but their similarities appear to reflect their role in regional production networks at least as much as the agreements they share.
“Membership in a trade grouping opens a door. It does not walk a country through it,” said Arturo Bris, Director of the IMD World Competitiveness Center.
Agreements can influence the areas they directly govern. DEPA members, for example, sit relatively close together on digital readiness. Broader institutional measures such as rule of law, however, continue to vary significantly.
The wider implication is that agreements can transmit standards and create opportunities, but they cannot substitute for domestic institutions, infrastructure, and capabilities.
Southeast Asia makes the biggest five-year gains
Across APEC’s 21 economies, the average Sustainable Trade Index score rose from 55.9 in 2022 to 62.7 in 2026.
The largest gains came from Southeast Asia, led by Vietnam, Malaysia, and Indonesia.
The source of that progress has also changed. Economic performance drove much of APEC’s improvement in the earlier years of the Index. Over the full five-year period, however, societal performance recorded the largest increase, while environmental performance became the region’s strongest and most consistent dimension.
The results also show how rarely progress is balanced across all three pillars.
The United States remains among the strongest economies economically but ranks much lower environmentally, while China shows a similarly uneven profile. The UK stands out because its performance is comparatively balanced.
Singapore offers another notable example. It finished first on the economic pillar while climbing nine places in the environmental pillar, showing that environmental gains are possible even in a dense, energy-intensive economy.
Sustainability is becoming a competitive capability
The report also argues that sustainability is increasingly shaping the terms on which firms and economies can participate in international trade.
Sustainability standards also influence market access beyond negotiated trade agreements. Measures such as the European Union’s Carbon Border Adjustment Mechanism can set conditions for market access, requiring exporters elsewhere to adapt even when their governments did not negotiate those rules.
That changes the economics of sustainability.
Clean power, traceable supply chains, credible environmental data, and enforceable labor standards can increasingly determine access to particular markets. Sustainability, in this sense, is becoming a source of comparative advantage rather than simply a compliance cost.
But there are also risks. The cost of demonstrating compliance can fall disproportionately on smaller producers, potentially concentrating trade among larger firms unless smaller actors are given the capacity to meet new standards.
With five years of comparable data, the Index points to a more complex understanding of sustainable trade – agreements matter, but the ability to benefit from them ultimately depends on what economies build behind their borders.
The economies best placed to adapt are those able to combine productive capacity with institutions strong enough to make economic, societal, and environmental gains endure.
