Progress across areas that are key for going paperless today will become even more important as countries and firms face the challenges of tomorrow, notably rising sustainability-related requirements.
The digitalisation of trade documents and processes
Going paperless today, going paperless tomorrow
Sustainability requirements have, to date, been largely voluntary, with a growing number of businesses choosing to track environment and social sustainability along the supply chain to attract consumers and investors. However, new initiatives requiring mandatory reporting are underway (Table 3) (OECD-BIAC-WEF, 2023[25]; Jaax and van Lieshout, 2025[26]).1 This “fast and furious” change in the regulatory landscape (Deconinck, Jansen and Barisone, 2023[27]) raises a number of new challenges, not least in the context of demonstrating compliance at the border.2 When enforcing sustainability requirements on imports, a key issue is that checking compliance cannot be done by physically inspecting or testing the imported goods. It requires information about how the product was processed or produced abroad (Pauwelyn, 2024[28]).
Mandatory sustainability-related requirements vary in nature, targeting different objectives, and using different reporting requirements. For some, the point of enforcement is at the border. That is, companies will be required to demonstrate compliance prior to their products being released into the import market. For others, compliance takes place behind the border, for example through annual reports on the businesses and their subsidiaries or suppliers’ international operations (Table 3).
Note: This list of measures is not comprehensive, it serves the purpose of providing emerging examples of regulation and the extent to which these might or might not trigger enforcement at the border.
Source: Drawing on initiatives presented in OECD-BIAC-WEF (2023[25]) and complemented with additional regulations identified.
Where enforcement takes place at the border, the ability of customs and other border agencies to verify compliance and the costs of meeting requirements by businesses will depend on:
The reporting standards. What information needs to be collected and the quality of that information; and
The mechanisms to exchange information. How this information is exchanged, including the data elements, documents and technologies that are needed to successfully exchange and verify compliance.
The complexity of emerging sustainability-related reporting standards can vary substantially. For instance, forced labour requirements often use origin as an important filter for determining compliance, with companies producing in higher risk locations generally required to provide evidence that forced labour was not used. In the case of requirements linked to carbon footprint, the information needed can relate to emissions along the entire value chain. In addition to reporting their direct emissions (Scope 1) and indirect emissions from purchased energy (Scope 2), companies are increasingly facing expectations to track emissions from upstream and downstream activities in their value chains (Scope 3). The amount and complexity of data that needs to be reported by traders and verified by relevant authorities varies substantially. Firms with more complex global supply chains are likely to find it more difficult to compile the data needed to meet some of these requirements.
How this information is transmitted from the businesses to the authorities also matters. For example, should Scope 1, Scope 2 and Scope 3 emissions be reported separately or together, should they be reported in tonnes of carbon dioxide equivalent (CO2eq) or another measure? Will they be filled out in a form, or will there be a dedicated and secure webpage for this? Who will be able to access this information and how will sensitive data be protected from misuse?
One particularly important challenge that emerges from the proliferation of sustainability standards is that different reporting and exchange of information standards will emerge at different border crossings. To avoid growing fragmentation, which could lead to additive costs of compliance along the supply chain but also to reduced ability of customs and border agencies to effectively enforce and monitor implementation, more technical and regulatory interoperability is needed.
Regulatory interoperability ensures that there is clarity and commonality in the reporting standards.3 That is, for example, when dealing with issues of environmental sustainability, that agreement is found on how GHG emissions are to be calculated and that this follows common accounting and reporting standards. In turn, technical interoperability enables the reduction of transaction costs and operational inefficiencies. For example, ensuring that there are common guidelines on the data attributes to be exchanged (e.g. the data fields and their format, whether numeric or not) and the technologies used for exchanging these across different sustainability-related requirements. Together regulatory and technical interoperability can enable more trusted and efficient exchange of data across the supply chain leading to lower compliance costs.
Tools for reporting, exchanging and verifying information on sustainability requirements are being developed in parallel by private and public sectors. These differ in their approaches, scope, and implementation. Several private sector initiatives have been focused on developing digital tools for the sharing of such sustainability-related information across value chains. These aim to address the issue of technical interoperability, while also accounting for countries and firms’ concerns over data sovereignty and confidentiality. Such tools include, for instance, the Partnership for Carbon Transparency (PACT) Pathfinder Network, Catena-X, or the Together for Sustainability (TfS) data exchange platform. The target group for these initiatives varies, with some having cross-sectoral memberships and an industry-agnostic focus, while others cover specific industries. Furthermore, some initiatives prioritise accessibility by lowering entry barriers to the platform, while others seek to foster trust among participants by setting specific requirements for participation (OECD, 2024[29]).
The PACT Pathfinder Network4 is an open technical specification enabling the interoperable exchange of emissions data among companies across a wide range of sectors and across diverse technology solutions (e.g. emission accounting software).
Catena-X seeks to develop an agile, secure data-sharing platform focusing on the automotive supply chain. It was initiated as a consortium of leading automotive companies, and collaborates with manufacturers, suppliers, and dealers, with a special focus on integrating SMEs. Catena-X adopts a decentralised, peer-to-peer approach for data exchange, similar to the PACT Pathfinder Network. Its technical foundation rests on a data connector that must be installed at each participant’s site, serving as a gatekeeper for incoming and outgoing data. Participants can specify the parameters of how and when to share data, with whom and under what conditions. Alongside the technical infrastructure, Catena-X has developed a Governance Framework, which outlines the requirements and responsibilities of participants and sets industry-specific standards, such as carbon footprint methodologies and data attributes. To engage with Catena-X, companies must undergo an audit to ensure compliance with its standards.
The TfS data exchange platform enables chemical companies to request detailed information from suppliers about the materials they purchase, particularly data related to the product carbon footprint using the related PCF Guideline. This information, when combined with a company’s own data regarding its value creation processes, offers a comprehensive view of the carbon footprint. In support of the platform, TfS has also been developing a Data Model for the reporting of product carbon footprint data and metadata.
Mandatory sustainability requirements also increasingly rely on the development of specific information systems and platforms for the reporting and verification of the information submitted by firms. For instance:
The European Union Deforestation Regulation includes the Information System, which is the IT system that is foreseen to contain the due diligence statements submitted by operators and traders to comply with the requirements of the Regulation. The statements would provide key information for monitoring, namely the HS code of the product, the quantity, the country of production and the geographical coordinates of the farm or plantation where the commodities covered by the regulation were grown. The European Union Information System is foreseen to interconnect with national customs IT systems across European Union economies.5
The European Union CBAM relies on the CBAM transitional registry for importers to report the information as part of their CBAM obligations. Access to the registry has to be requested through the CBAM National Competent Authority (NCA) of the European Union Member State in which the importer is established. A report can be submitted by a declarant on behalf of a signatory who certifies that the information is correct. The registry is foreseen to enable communication between the European Commission, NCAs, customs authorities of European Union economies, and reporting declarants. While this provides a centralised electronic registry to streamline data collection and communication, the primary responsibilities of registration and CBAM certificate management are handled by national authorities within each Member State.6
The development, in parallel so far, of such private and public platforms entails significant challenges for technical interoperability, in terms of the integration of trade-related documentary requirements, border processes, data exchange, and stakeholders’ IT systems.
Lessons from sectors such as agriculture and food, which have been confronted with regulatory and technical interoperability challenges in digitalising the exchange of sanitary and phytosanitary (SPS) certificates, can prove useful for a better understanding of the building blocks for technical interoperability. OECD analysis of SPS e-certificates7 highlights that overall interoperability rests upon the development and adoption of international standards for the exchange of information, clarifying the role of border agencies, and the set-up of information exchange platforms clearly coordinated with national systems for trade (e.g. Single Windows for trade) (Annex E provides further details) (Laget and Deuss, 2025[30]).
The implementation of sustainability-related regulations also raises new questions (Figure 16) in the context of the regulatory environment for going paperless (Figure 2). This includes questions about what new documents may be needed for conducting transactions electronically and whether existing regulatory frameworks allow for these to be exchanged across borders. In terms of digitalising border processes, the question might be whether new information needs to be incorporated into existing customs declarations or whether entirely new documents are needed. In the context of cross-border exchanges of information, questions arise about how governments will protect commercially sensitive information.
Note: The list is illustrative based on a review of selected regulations in Table 3.
Source: Author’s elaboration.
The checklist in Figure 16 shows that the going paperless policy environment can help create the technical interoperability needed to underpin implementation of sustainability initiatives. In particular for initiatives where compliance is linked to market access, the legislative and operational framework for the sustainability initiative needs to:
clearly define, in terms of scope, purpose, and procedures, if and where new digital tools, platforms, or documents are needed for the exchange of information,
clarify what compliance entails for border processes and how any new compliance procedures will be integrated with the overall trade facilitation ecosystem to minimise risks and disruptions to border clearance.
As the growth in sustainability initiatives linked to market access is a relatively recent and rapidly moving phenomenon, little systematic evaluation is available in terms of practical implementation at- and behind-the-border. With the caveat that guidance on implementation is still work in progress for many of these initiatives, some important insights can be gleaned from an analysis of selected regulations in Table 3.8
This analysis reveals that the guidance for implementation of the selected social and environmental sustainability requirements mainly includes aspects relating to the border process and some limited aspects concerning documentary requirements (e.g. documents of conformity, supply chain9 audits) or platforms for the exchange of information (Figure 17, with more information on the detailed features across these areas is provided in Annex F). Aspects of border agency co-operation appear to be rarely incorporated in the guidance, despite various agencies’ links to the clearance process.
The analysis also shows the complexity of ensuring that any new requirement can benefit from paperless trade. For documentary requirements, implementation guidance generally does not specify whether any new information will need to be integrated into existing customs declarations, nor provide information on specific standards and data formats for any new documentation required (Annex Figure A F.1).
Summary of features, share in selected number of regulations (%)
Note: The chart is based on the following regulations and their available implementation guidance: Australia bill banning imports made using forced labour (2021); US Customs and Border Protection Forced Labour Trade Law (2022); Canada BILL S-211 enacting the Fighting Against Forced Labour and Child Labour in Supply Chains Act (2023); Mexico Forced Labour Law (2023); European Union ban on products made with forced labour (2024); United Kingdom Environment Act (2021); European Union Deforestation-free Products Regulation (2023); European Union Carbon Border Adjustment Mechanism (2023); European Union Ecodesign for Sustainable Products Regulation (2024). Figures in Annex F provide further information on the dimensions covered within each area.
Source: Author’s elaboration.
While in many cases the regulations foresee the creation of new platforms for the exchange of information, they do not indicate how this will be integrated with existing national customs and border systems for processing trade-related information (i.e. such as Single Windows or automated customs systems) (Annex Figure A F.3), or whether integration is not required. The mention or introduction across various of the regulations of ‘product digital records’ or ‘traceability systems’ emphasises, however, the complex information required from firms to prove compliance. An additional challenge is that the implementation guidance also generally does not address potential linkages with private sector platforms already compiling some (or most) of the relevant information, foregoing potential economies of scale for firms (Annex Figure A F.2).
Similarly, although in many cases (particularly in the case of environmental sustainability) additional agencies with responsibility for managing relevant border processes are key (e.g. designated national competent authorities), the regulations do not explain the specific mechanisms for co-operation with customs and other relevant border agencies in terms of institutional framework, the clearance process, and IT systems (Annex Figure A F.4). The lack of specific mechanisms for domestic border agency co-operation in the implementation of these regulations can also complicate external border agency co-operation and interoperability amongst national Single Windows for trade.
Notwithstanding some important clarifications in implementation guidance and several common features across regulations, the differences highlighted in Annex Figures A F.1-4 underscore the challenge for firms. The lack of regulatory and technical interoperability may be especially burdensome for export-intensive companies operating across multiple jurisdictions, and for smaller firms. This situation is further compounded in developing and low-income countries, which typically have less capacity to address these interoperability challenges compared to developed economies (National Board of Trade Sweden, 2023[31]; OECD, 2024[29])
Overall, the analysis highlights the importance of:
clarifying in implementation guidance the relationship to the border process in terms of documentary requirements, data platforms and cross-border exchange of information, border formalities and procedures, and mechanisms for border agency co-operation.
enhancing the accessibility and comprehensiveness of the information provided on implementation through online, user-friendly information portals, training and capacity building (for both border officials and trading partners).
conducting periodic reviews of implementation at the border for more coordination among countries in avoiding regulatory fragmentation and limiting the regulatory burden on firms.
← 1. Measures covered by trade agreements (e.g. conditional market access based on environmental or social sustainability criteria) are outside the scope of the analysis here.
← 2. However, bilateral agreements focused on green transition issues are also starting to incorporate elements of digitalisation in support of environmentally sustainable trade. For instance, the principles of green economy co-operation in the Australia-Singapore Green Economy Agreement include the identification of “green economy-related trade facilitation initiatives, including through digitalisation (…), paperless trade and relevant work conducted under the Singapore-Australia Digital Economy Agreement”.
← 3. Developments in methodologies and reporting requirements are described in Deconinck, Jansen and Barisone (2023[27]) for agriculture and food and in OECD (2024[29]) for other sectors.
← 4. It was developed as the technological counterpart of the PACT Pathfinder Framework (discussed above) by the World Business Council for Sustainable Development (WBCSD) and the SINE foundation - in collaboration with different stakeholders like technology companies and standard-setting bodies.
← 5. European Union Regulation on Deforestation-free Products, January 2025: https://environment.ec.europa.eu/topics/forests/deforestation/regulation-deforestation-free-products_en.
← 6. CBAM implementation guidance, January 2025: https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en.
← 7. Related work on the role of electronic SPS certificates has been undertaken in the Joint Working Party of Trade and Agriculture (TAD/TC/CA/WP(2023)4/FINAL).
← 8. This includes the following regulations: Australia bill banning imports made using forced labour (2021); United States Customs and Border Protection Forced Labour Trade Law (2022); Canada BILL S-211 enacting the Fighting Against Forced Labour and Child Labour in Supply Chains Act (2023); Mexico Forced Labour Law (2023); European Union ban on products made with forced labour (2024); United Kingdom Environment Act (2021); European Union Deforestation-free Products Regulation (2023); European Union Carbon Border Adjustment Mechanism (2023); European Union Ecodesign for Sustainable Products Regulation (2024).
← 9. Such obligations are sometimes accompanied by descriptions of what is considered part of the supply chain according to the law. But this concept is often left open-ended, potentially covering the firm’s entire supply chain, meaning their suppliers, their suppliers’ suppliers, and so forth (Jaax and van Lieshout, 2025[26]).