With the world's focus on sustainability shifting into high gear, companies are charting a course through a sea of regulations. Our guide delves into notable sustainability standards and regulations that businesses should be aware of, such as new disclosure frameworks, reporting obligations, and mandatory requirements in reducing emissions to help organizations not just survive but thrive in a sustainable world.
As the world becomes increasingly focused on sustainability, businesses are facing new sets of regulations to navigate. From achieving energy efficiency targets to reducing emissions, these regulations are designed to drive companies toward adopting more sustainable practices. However, it can be difficult for companies to know where to begin with so many regulations to consider.
To date, there are more than 600 global reporting frameworks and requirements for environmental, social, and governance (ESG). That's why we compiled a list of notable sustainability regulations and standards that businesses should be aware of. In this guide, we will explore the highlights of these regulations and standards and unearth how they can serve as foundations for the organization’s sustainability initiatives.
We classified these regulations into two separate categories: voluntary sustainability frameworks and the mandatory legal regulations.
Voluntary sustainability frameworks
For organizations that want to highlight corporate social responsibility as an integral facet of their brand, they can proactively pursue sustainability goals to concretely show that they’re aligning their business with the common good. Rather than forge ahead blindly or potentially do more harm than good, they can adopt frameworks that were developed by relevant stakeholders and industry experts and are widely adopted by organizations around the world.
These standards and frameworks include the following:
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The United Nations’ (UN) Sustainable Development Goals (SDGs)
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The Climate Disclosure Project’s (CDP) voluntary reporting framework
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IWA 16:2015 [International harmonized method(s) for a coherent quantification of CO2e emissions of freight transport]
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Science-based targeting framework by the Science Based Targets initiative (SBTi)
Mandatory legal regulations
Mandatory sustainability regulations and standards are legally binding requirements established by government and other regulatory entities to guarantee that companies and organizations adopt environmentally and socially responsible practices. These regulations and standards encompass a broad range of topics, including reduction of emissions, energy efficiency, and sustainable resource management. Organizations are obliged to comply with these regulations and noncompliance can result in penalties and fines.
Some of these regulations include the following:
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Non-Financial Reporting Directive (NFRD) for the EU
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Corporate Sustainability Reporting Directive (CSRD) for the EU
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Lieferkettengesetz (the Supply Chain Due Diligence Act in Germany)
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Clean Air Act (US)
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Clean Water Act (US)
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National Biodiversity Act (India)
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Energy Conservation Law (China)
Using analytics to navigate sustainability regulations and standards
With sustainability now an imperative, the challenge is how to expertly navigate the maze of global and regional standards and regulations while quickly adopting sustainable practices along the way. There might be overlapping variables, scope, and objectives, differing rules and exemptions, clashing priorities, and opposing requirements that organizations must get a handle on. Businesses, too, need to align their initiatives with a long-term strategy that meets the forward-looking objectives of these standards and regulations.
Advanced analytics provides the solid foundation for organizations to tangibly track the cost, performance, and impact of their sustainability initiatives while demonstrably foreseeing future requirements. By consolidating and analyzing data on sustainability-related success factors, such as usage of energy or other resources, GHG emissions, and supply chain performance, organizations can derive the right actionable insights and ensure the accuracy and credibility of their reporting/disclosures.
Download our guide, “Sustainability Regulations and Standards: A Guide for Navigating the Corporate Responsibility Landscape,” to learn about the highlights of notable sustainability laws and frameworks and enable the organization to keep pace with the ever-evolving landscape of corporate responsibility.
