Are You Playing Hide-and-Seek in Your Business?

Legislative initiatives promoting responsible business practices have taken big leaps forward lately. To date, corporate responsibility practices have been softly guided by self-regulation by international organisations, industry associations and corporations themselves. Things are starting to get more serious in the form of mandatory legislation.

Transparency Is the Key

The common feature of the current legislative initiatives is transparency. Pressure to be more open has been coming from corporations’ interest groups, the authorities as well as investors. This combined front has added urgency to many legislative projects, particularly on the EU level, and it would be wise to not drag out a game of hide-and-seek, but to proactively get out in front of the upcoming changes.

There are several mandatory legislative projects currently pending in the EU that are aimed to increase transparency and public trust in responsible business practices:

As I mentioned at the start, the pressure for more transparent and responsible business practices is strong from a number of directions, and the EU has answered this pressure with legislative initiatives. New legislation will, naturally, also introduce new sanctions intended to enforce compliance. However, the sanctions relating to the reforms that are already in force are quite moderate. In the end, it is more important that companies listen carefully to the wishes and thoughts of their own stakeholders with respect to corporate behaviour than that they just seek to avoid formal sanctions. At its best, legislation provides a unified framework for how to inform stakeholders about these matters, and it is worth preparing for the upcoming requirements.

This post was inspired by a presentation given by Rosanna Tufo from CSR Europe in Helsinki in March 2017.