Compliance and sustainability — two topics, one driver
Duties and regulations have long been standard when it comes to compliance. The current situation is a bit different when it comes to corporate sustainability — but no field is currently developing more dynamically. For example, the gradual introduction of the Corporate Sustainability Reporting Directive (CSRD) initially affects large corporations, but also small and medium-sized companies in the medium term. It is therefore time for employees to also know what they can do, must do or should not do in order to avoid violations and penalties. Find out how you can minimize risks in both areas — compliance and sustainability — here.
Common drivers for compliance and sustainability
Anyone who thinks of compliance immediately has liability risks in mind. Companies have numerous adjustments to avoid risks. Comprehensive compliance management systems are implemented to document, control and also to reduce liability risks.
Companies that take a close look at their sustainability strategy find that compliance and sustainability are closely linked. They pursue similar goals: moving the company into the future in a responsible, ethical and legally conform manner. This also results in common drivers:
- Regulatory requirements
- reputation
- risk management
- competitive advantages
- stakeholder interests
Differences: Compliance vs. Sustainability
Compared to compliance, corporate sustainability is sometimes a new issue for many companies. One of the reasons for this is external laws and guidelines that have long been established for Compliance & Co. From this perspective, the decisive differences are quickly apparent:
Compliance
- Objectives: Ensuring compliance with legal and regulatory requirements as well as internal guidelines, integrity and reliability
- focus: Avoiding 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
- Objectives: Promoting sustainable business practices that provide 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 immediately measurable. Success indicators can include qualitative and quantitative aspects, such as CO2-Reduction, social indicators or finally the sustainability report
There are established but also new regulations for compliance, such as the AI Act, which quickly result in fines amounting to millions of euros in the event of violations. The first requirements for corporate sustainability have only been defined in recent years. Some of the requirements at EU level are therefore currently being translated into national laws. That is why there is a lot of movement in this area; adopted guidelines are being revised or rejected again.
However, this in no way means that companies are currently sitting back and waiting. On the contrary: Many companies are already working on identifying data sets, identifying their key topics using a double materiality analysis or writing sustainability reports — partly mandatory, partly voluntarily. The appropriate standards have been created for this. And that's a good thing. There is no way without standards in both areas, as these ensure legal certainty and risk minimization, among other things.
The role of employees in compliance and sustainability
Negligence is enough. Someone who violates regulations or is careless. Be it clicking on a phishing link and thus letting a virus into the system. Or greenwashing is carried out unconsciously or AGG is left behind in the recruiting process. Where people work, mistakes happen, sometimes unintentionally, sometimes intentionally, but when it comes to compliance, data protection, environmental protection, etc., mistakes are expensive in most cases — and in the end, the company has the problem.
One of the biggest risk factors is therefore unintentional misconduct. The most effective way to avoid this? Training and participation! Every single employee has responsibility — and must be aware of it. In both compliance and corporate sustainability, employees play a central role in ensuring legal certainty. Through training, awareness raising, active participation and responsibility, they help companies meet legal requirements and implement sustainable practices. A strong corporate culture that promotes integrity and a sense of responsibility is crucial for success in both areas.
An example: Employees can be involved in collecting and reporting sustainability data. This transparency is important to demonstrate compliance with legal requirements and voluntary sustainability standards. In doing so, they are actively involved in ensuring legal certainty.
Reduce liability risks through knowledge and awareness
It is better to be careful 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 are avoided if employees are informed and know the legal pitfalls. In addition, sensitized and responsible employees make a significant contribution to ensuring that your company remains on the safe side and successfully steers towards a sustainable and legally compliant future.
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