Trade finance tech company TradeSun has partnered with consultancy ReThink Sustainability as both firms look to help customers improve their ESG scoring.

After receiving a rating from TradeSun’s automated CoriolisESG tool, clients will work with ReThink consultants to develop their ESG strategies, including identifying areas for improvement and ways of making more sustainable decisions, the firms say.

“Businesses around the world are facing increasing pressure and regulatory requirements to be more transparent about their ESG credentials. The ReThink – CoriolisESG partnership helps businesses meet these increasing pressures,” says Nigel Hook, TradeSun chief executive.

CoriolisESG measures company data against a range of global frameworks, such as the UN’s Sustainable Development Goals and the status of greenhouse gas scope 1, 2 and 3 emissions, and generates a report that includes risk analysis and improvement suggestions.

Supply chain sustainability is a particular focus for the new partnership, Justin McFarlane, global managing partner at ReThink Sustainability, tells GTR.

“The CoriolisESG platform gives a fantastic, high-level indication of where a company might be in the sustainability process. For more experienced customers that have, in some cases, spent hundreds of millions of dollars on their sustainability journey, we can carry out a supply chain review to help them get a good idea of what their lesser-tier supply chain channels and partnerships look like,” says McFarlane.

“That’s highly valuable in many cases where a lot of the smaller companies may be less likely to invest in a thorough ESG or sustainability-outcome-focused process,” he adds.

Lloyd Parata, TradeSun’s sales director for the Asia Pacific region, tells GTR the firm is seeing a lot of enquiries from customers worried about reputational risk arising from accusations of greenwashing.

Regulators have taken a much harder line on greenwashing in recent months: the European Commission is currently consulting on how much firms need to disclose about sustainable products, and the UK’s Financial Conduct Authority recently announced that any financial services firm claiming to market a green product will need to be able to provide evidence to back it up.

TradeSun bought Coriolis Technologies a year ago, after incorporating the analytics provider’s ESG rating system into its platform in August 2022.

The rating mechanism was originally developed in consultation with a working group made up of over 40 financial institutions and professional bodies.

TradeSun has continued this approach, Parata says, with a working group of over 70 organisations, including banks, trade and professional bodies, governmental organisations and businesses.

“These organisations join us monthly for our collaborative ESG working group, where they put our methodology under scrutiny, and aim to arrive at a consensus on assessment criteria and metrics. The group also provides us with their requirements for future sustainability assessment requirements,” Parata says.

“We’re not a fintech that’s built something on our own – our methodology, what we measure, how we measure it and how we improve, is, and has been, done in collaboration with the working group,” he says.

The plethora of sustainability standards in trade finance has also led to attempts by industry organisations like the International Trade and Forfaiting Association and the International Chamber of Commerce to simplify ESG requirements into an overarching framework.

“We know that we have the world’s only independent, data driven, verifiable and objective ESG assessment mapped to regulatory standards and frameworks. We’ll continue to work with our stakeholders to try and achieve a global standard,” Parata adds.