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Paper short abstract

Grain traders circumvent EU deforestation governance through loopholes constructed in ESG reports. Analysis of eight reports from ADM, Bunge, Cargill, and Louis Dreyfus reveals how corporate texts produce responsibility, measurement, and disclosure gaps making regulatory evasion invisible.

Paper long abstract

The EU Deforestation Regulation requires proof that imported soya is deforestation-free. Nevertheless, Bastos Lima and Schilling-Vacaflor (2024) show that transnational traders circumvent this by segmenting supply chains: compliant batches go to the EU, non-compliant production goes elsewhere. The empirical pattern is clear, but a gap remains in explaining how these loopholes are discursively produced and legitimised within corporate sustainability governance itself. This study uses discourse analysis of eight ESG reports from ADM, Bunge, Cargill, and Louis Dreyfus to examine how the textual apparatus of corporate reporting constructs the conditions under which regulatory evasion becomes procedurally invisible.

The analysis identifies three types of discursively constructed loopholes. Responsibility loopholes emerge where traders disclaim farm ownership yet control market access through satellite monitoring, geolocation polygons, and fintech platforms that tie credit to corporate ESG criteria. The disclaimers construct a gap between governance authority and accountability. Second, measurement loopholes arise where companies set their own classification thresholds and then apply them to assess their own supply chains through proprietary monitoring infrastructure. Third, disclosure loopholes is where the same reports mark mandatory indicators as 'not currently available' and later disclose positive performance data drawn from the very monitoring systems those indicators require.

These loopholes are actively created by discursive and technological formats that converge across four competing companies that produce the reports independently. The texts are reduced to forms of discourse aimed at complying with regulations and reassuring stakeholders from the Global North rather than actual transformation in the affected nations.