Trade finance technology firm TradeSun is set to incorporate an environmental, social and governance (ESG) scoring system, developed by trade data and analytics provider Coriolis Technologies, onto its compliance platform.
US-based TradeSun first entered the trade finance space in 2018, piloting an artificial intelligence-based solution to digitise and automate the processing of trade documents with a group of nine banks the following year.
The company has since launched its platform, which extracts and standardises data from documents using optical character recognition and natural language processing technology. Banks upload data either manually, or through an application programming interface.
Financial institutions can then run compliance checks or verify whether their document meets international rules such as the International Chamber of Commerce’s Uniform Customs and Practice for Documentary Credits.
Under the new agreement, TradeSun’s banking clients will be able to draw on the Coriolis ESG Tracker, a rating mechanism that uses publicly available data to assess the performance of their trade-related activities or customers.
The Coriolis scoring system, which captures the performance of companies and their products against the 17 Sustainable Development Goals defined by the United Nations, has been developed with input from a working group consisting of over 50 financial institutions, including banks, insurers and multilateral organisations.
TradeSun users will also be able to view how transactions are rated against domestic and international regulatory frameworks such as the EU Taxonomy, Sustainable Finance Disclosures Regulation and US Sustainability Accounting Standards Board Regulations.
Policymakers, financiers and corporates have long grappled with what constitutes sustainable trade, with the sector having struggled to develop methods that would allow lenders to proper properly assess the entirety of the sustainability performance of trade finance transactions, leaving the industry open to accusations of greenwashing.
Earlier this year, Coriolis entered into similar agreements with commodity-focused blockchain platform MineHub, as well as Toronto-headquartered trade finance tech firm Surecomp.
A TradeSun spokesperson says that the joint solution with Coriolis has now launched and discussions are being held with banks about its use.
As reported by GTR earlier this year, the number of users on the TradeSun platform is now in the double-digits and includes JP Morgan, which supported the development and launch of the fintech’s real-time compliance product.
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