In the past decade, regulatory demands on businesses have intensified. While traditional concerns like trade rules and product safety remain, the focus has shifted to how businesses operate at their core. The European Union has led this transformation with regulations spanning data privacy (GDPR), IT security (NIS2) and corporate sustainability (CSRD, EU Green Deal, EU Taxonomy).
At the same time, businesses are navigating a perfect storm of geopolitical instability, technological disruption and shifting market expectations. Amid this complexity, sustainability compliance has become a critical factor for long-term competitiveness.
Yet, meeting compliance requirements while maintaining profitability is no small feat. The key question is: how can businesses stay compliant and competitive while freeing up resources to seize opportunities created by regulatory changes and emerging technologies?
Data: a game-changer in sustainability compliance
Successful businesses share a common trait: they know their operations inside out. But today, it’s not just about knowing – it’s about using data effectively to navigate regulatory challenges.
Sustainability compliance, in particular, is heavily data-driven. Since the Paris Agreement and the EU Green Deal, new legislation has emerged to enforce transparency and accountability in corporate sustainability efforts.
Consider this:
- Since 2019, several mandatory ESG-related regulations have been introduced. Non-compliance could mean severe penalties – or even going out of business.
- 19 voluntary standards, frameworks and guidelines have shaped the sustainability agenda since the Brundtland Report in 1987.
Add to this the pressures of GDPR and NIS2, and it’s clear that compliance efforts are being stretched across multiple fronts.
Where to start? A structured approach to data and processes
For businesses that have yet to establish a structured approach to data and processes, sustainability compliance can seem overwhelming. But here’s the good news: if your company has completed projects like ERP implementations, GDPR compliance or AI initiatives, you already have a foundation to build on.
Here’s how to get started:
- Understand value chain and processes: Map out a high-level process landscape, including operating and supporting processes.
- Understand existing data: Assess what data is already captured in ERP, HR and other systems before investing in new, costly data collection efforts.
- Prioritise: Identify where AI, systems, and technologies can unlock the greatest business potential. Pinpoint efficiency gains in compliance and support functions.
- Engage stakeholders: Refresh your “contract” with key stakeholders by understanding their evolving interests beyond just the product or service sold.
Real-life example: turning compliance into competitive advantage
Companies that successfully integrate sustainability compliance into their operations go beyond a checkbox exercise – they turn compliance into a strategic advantage.
Take the example of a large international retailer. Their manual data collection process for climate reporting was no longer fit for purpose. With the Corporate Sustainability Reporting Directive raising the bar, they needed a solution that could stand up to audits, scale with their business and provide actionable insights.
We helped the retailer automate their climate data programme. Using their cloud-based data platform, we streamlined data collection, transformation, and visualisation. This resulted in a dashboard providing a comprehensive view of their climate footprint – from raw materials to the end-of-life of their products.
Key impacts included:
- Regulatory compliance: The automated process passed an internal test audit, ensuring CSRD readiness.
- Actionable insights: The retailer identified opportunities to cut emissions and support renewable energy transitions.
- Resource efficiency: Automation freed up resources for deeper analysis and other sustainability initiatives.
Beyond must-win battles: the systemic approach to change
The most successful companies don’t stop at compliance. They embrace long-term, integrated sustainability strategies – rooted in data, technology and stakeholder engagement – to navigate both the risks and opportunities of this rapidly evolving landscape.
The most difficult transformation is often moving away from short-term “must-win battles” toward a systemic approach that truly drives sustainable change.
Let’s talk
At Valcon, we specialise in data-driven sustainability compliance solutions. Whether you’re navigating CSRD or looking to optimise your sustainability reporting, we’re here to help.
How is your organisation approaching sustainability compliance? Please reach out to Anders Worsøe Gantzhorn at [email protected] if you want to start a conversation.
