Lately there has been much chatter about Environmental, Social, and Governance (“ESG”) policies in business. Elon Musk has called ESG “an outrageous scam.”[1] And while there is no clear definition, investors and ratings agencies, as well as ultimate buyers and consumers, increasingly look for financially and morally sound companies that are committed to these principles, and the U.S. government is codifying various aspects of the wider ESG umbrella into law. Investors are increasingly active and interactive with the companies in which they invest. Because the financial incentivizes for appearing ESG-compliant are high, so too is the likelihood that companies will cheat on ESG reporting.
ESG principles are a growing part of compliance programs and the integration of ethics into business culture and identity are paramount. Companies cannot pretend to comply with ESG by simply ticking the right boxes. Businesses with international trade operations should examine how ESG principles are integrated into their operations. While commenters tend to focus much attention on the Environmental side, this article will look at the trade-related areas encompassed by the Social and Governance aspects of ESG, including Human Rights, Forced Labor, Trade Controls, Anti-Corruption, and other areas of trade-related corporate compliance.
Forced Labor
Human rights, which encompass issues related to forced labor, straddle the line between Social and Governance principles. ESG-minded…
