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Compliance and sustainability - two topics, one driver

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Compliance and sustainability at the same time.

Obligations and regulations have long been standard when it comes to compliance. The situation is still somewhat different when it comes to corporate sustainability - but no field is currently developing more dynamically. The gradual introduction of the Corporate Sustainability Reporting Directive (CSRD), for example, will initially affect large corporations, but will also affect small and medium-sized companies in the medium term. It is therefore time for employees to know what they can do, must do or should not do in order to avoid infringements and penalties. Find out how you can minimize the risks in both areas - compliance and sustainability - here.

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Common drivers for compliance and sustainability

When you think of compliance, you immediately think of liability risks. Yet companies have numerous ways of avoiding risks. Comprehensive compliance management systems are implemented to document, control and also reduce liability risks.

Companies that take a close look at their sustainability strategy realize that compliance and sustainability are closely linked. They pursue similar goals: To lead the company into the future in a responsible, ethical and legally compliant manner. This also results in common drivers:

Visualization of the common drivers for compliance and sustainability
  • Regulatory requirements such as CSRD
  • Reputation
  • Risk management
  • Competitive advantages
  • Stakeholder interests

Minimize risks

An important factor in minimizing risks is employee training. Blindly signing multi-page guidelines as if they were general terms and conditions does not lead to an understanding of compliance among employees. Find out here how you can communicate the sustainability and compliance ABC to the entire workforce in an understandable way, from occupational health and safety to environmental standards.

Digital training in compliance and sustainability

Differences: Compliance vs. sustainability

Compared to compliance, corporate sustainability is sometimes a new topic for many companies. One of the reasons for this are external laws and guidelines that have long been established for compliance and the like. From this perspective, the key differences are quickly recognizable:

Compliance

  • Objectives: Ensuring compliance with legal and regulatory requirements as well as internal guidelines, integrity and reliability
  • Focus: Avoidance of legal violations, legal risks and sanctions
  • Measurability: Easily measurable through compliance or non-compliance with specific regulations, e.g. through audits and inspections

Corporate Sustainability

  • Goals: Promote sustainable business practices that deliver long-term economic, environmental and social benefits
  • Focus: Improving environmental performance, social responsibility and long-term corporate strategy
  • Measurability: KPIs are more complex and less directly measurable. Success indicators can include qualitative and quantitative aspects, such asCO2 reduction, social indicators or finally the sustainability report

There are both established and new regulations for compliance, such as the AI Act, which can quickly lead to fines in the millions in the event of violations. The first requirements for corporate sustainability have only been defined in recent years. The requirements at EU level are therefore currently being partially translated into national laws. As a result, there is a lot of movement in this area, with adopted directives being revised or discarded.

The Supply Chain Due Diligence Act: Diligence vs. fulfillment

There has been much discussion, for example, about the Supply Chain Due Diligence Act (LkSG). This aims to prevent human rights violations in supply chains. But what can companies be expected to do? Small and medium-sized companies may not have the resources to implement requirements with stakeholders along their supply chains. In addition, this law is a due diligence law. This means that it is not a compliance obligation. Companies are therefore required to comply with their reasonable efforts obligation.

However, this does not mean that companies are currently sitting back and waiting. On the contrary: many companies are already working on determining data sets, identifying their material topics using the double materiality analysis or writing sustainability reports - some of which are mandatory, some of which are voluntary. The relevant standards have been created. And that is a good thing. Standards are essential in both areas, as they ensure legal certainty and minimize risk, among other things.

The role of employees in compliance and sustainability

All it takes is negligence. One person or one person who violates guidelines or is careless. Be it clicking on a phishing link and letting a virus into the system. Or unknowingly greenwashing or ignoring the AGG in the recruitment process. Wherever people work, mistakes happen, sometimes unintentionally, sometimes intentionally, but when it comes to compliance, data privacy, environmental protection and the like, mistakes are usually costly - and the company ends up with the problem.

So one of the biggest risk factors is unintentional misconduct. The most effective way to avoid this? Training and participation! every single employee bears responsibility - and must be aware of this. Both in the area of compliance and corporate sustainability, Employees play a central role in ensuring legal certainty. Through training, awareness-raising, active participation and responsibility, they help to ensure that companies meet legal requirements and implement sustainable practices. A strong corporate culture that promotes integrity and a sense of responsibility is crucial to success in both areas.

One example:

Employees can be involved in the collection and reporting of sustainability data. This transparency is important in order to demonstrate compliance with legal requirements and voluntary sustainability standards. They are thus actively involved in ensuring legal certainty.

Reducing liability risks through knowledge and awareness

Better safe than sorry - this is especially true when it comes to liability risks. Risks can be significantly reduced through targeted awareness-raising and training of your employees. Issues such as greenwashing, whistleblowing or competition violations can be avoided if employees are informed and aware of the legal pitfalls. In addition, sensitized and responsible employees make a significant contribution to ensuring that your company remains on the safe side and steers successfully into a sustainable and legally compliant future.

Killing two birds with one stone

With Haufe Akademie 's Compliance and Sustainability courses, you can turn your employees into your allies. Accusations of greenwashing or corruption can become a thing of the past.