Sustainable trade: ESG and carbon footprint in supply chains

Environmental, Social, and Governance (ESG) factors are increasingly influencing international trade. Buyers in the EU, US, and other developed markets are requiring suppliers to demonstrate sustainability credentials.

Why ESG Matters for Traders

• EU Carbon Border Adjustment Mechanism (CBAM) — From 2026, importers of certain goods into the EU must report and pay for embedded carbon emissions. Affected sectors include steel, aluminum, cement, fertilizers, and electricity.
• Due diligence laws — The EU Corporate Sustainability Due Diligence Directive requires large companies to identify and mitigate human rights and environmental risks in their supply chains.
• Buyer expectations — Major retailers and brands increasingly require sustainability certifications from their suppliers.

Common Certifications

• ISO 14001 — Environmental management systems.
• GOTS — Global Organic Textile Standard for textiles.
• FSC — Forest Stewardship Council for wood and paper products.
• Fair Trade — Ensures fair labor practices and prices.
• BSCI / Sedex / SA8000 — Social compliance audits.

On Faktorist

Suppliers can upload ESG certifications to their profile. Buyers can filter search results by sustainability credentials. The platform also displays indicative carbon footprint data for shipments based on origin, destination, and transport mode.