What is Trade Compliance?
Trade Compliance encompasses the set of techniques and procedures employed by an organization to ensure its compliance with the rules and guidelines governing its international trade operations, including imports and exports, as well as other international transactions such as international data transfers and international investments.

What is ESG?
ESG is an English term that stands for Environmental, Social, and Governance. It was developed within the framework of the United Nations and represents. the three core pillars that should be observed by companies and other organizations to contribute to the goals of sustainable development.

The term has been gaining prominence due to the growing concern about sustainable development from governments, civil society, and other entities, such as banks and investment funds. Non-compliance with these rules has increasingly yielded negative outcomes for companies.

The Relationship Between ESG and Trade Compliance
ESG Trade Compliance, therefore, comprises the set of techniques and procedures used to ensure that companies comply with national and international legislation aimed at upholding ESG standards.

Check out examples of measures that must be adhered to, ensuring alignment of companies with ESG principles and access to markets.

(E) Environmental
• CBAM in the European Union;
• Deforestation Act in the European Union.

(S) Social
• Prohibition of imports of products produced with forced labor in the United States (Section 307 of the Tariff Act of 1930);
• Maintenance of lists of products produced by child labor and forced labor by the Bureau of International Labor Affairs in the United States.

(G) Governance
• Act on Corporate Due Diligence to Prevent Human Rights Violations in Supply Chains in Germany;
• Brazilian Anti-Corruption Law.

Failure to comply with these regulations can have direct consequences for companies, both domestically and internationally. Failure to comply, in addition to the specific sanctions provided for, entails possible reputational damage. ESG Trade Compliance should be used as a tool for improving processes and minimizing these risks.