Compliance and sustainability

- As the global focus on sustainability intensifies, businesses are facing a growing array of new restrictions and regulations on the materials they use, the by-products they produce, the safety of their facilities, and other aspects of their operations. These restrictions, both voluntary and involuntary, are coming from a variety of industry initiatives and governmental and nongovernmental organizations as well as consumers. In many countries, violations of environmental laws can result in criminal sanctions and civil penalties, plus the negative press and lost revenue that comes from tarnishing your brand. Even in developed countries with well-established regulatory programs, full compliance with environmental regulations is a challenging goal. Interestingly, legal compliance alone is no longer viewed as the end game by many companies. A growing number of companies have found that a dedicated focus and going beyond legal compliance can produce tangible financial benefits such as product innovation, lower costs, and improved product quality. A reputation for environmental responsibility also can be a badge of good corporate citizenship, producing positive marketing and public relations benefits. Ask yourself which areas in your business are covered by legislation, regulations and mandatory standards at the international, national and state levels? And what voluntary codes, standards and initiatives are emerging as key to your industry and in your markets? Then take these important steps to better ensure compliance and move forward toward real sustainability. Know how your products are made, focusing especially on your key materials and processes. If you don't know the composition of your products you're in no position to prove that they do no contain restricted, regulated or controversial substances. Know and control who makes your products. Your company is responsible for the compliance of its products. One weak link or unauthorized substitution and your supply chain, domestic or global, can make your product noncompliant or exposed to compromise. Plan ahead to achieve compliance and improve sustainability within your business. Reacting to compliance or opportunities for sustainability instead of planning for them, increases cost to the environment and the organization. Moreover, it can expose you to fines and loss of market access. Develop a contingency plan and practice it. New requirements can arise unexpectedly from new and existing markets. It's essential to prepare to manage them effectively as as organization, whether expected or not. The environmental and social compliance expectations of consumers and stakeholders rise along with per capita income. That means emerging economies increasingly are enacting and enforcing their own environmental regulations. Keep on top of the regulatory climate and pay close attention to consumer activism in your key categories. Be aware of new and proposed regulations and trends that could affect your business. Join your industry association and participate in it. By staying on top of regulatory developments as well as hot button trends in your industry, you'll better assure compliance and start moving towards sustainability. If done right, you'll find interesting ways to move beyond compliance, toward innovation and differentiation.