If they haven’t already, companies must begin making changes as soon as possible to stay ahead of the curve on regulations and laws that are being rapidly put in place. Governing bodies and countries alike are drafting legislation or creating benchmarks for the future of sustainability.

Why sustainability regulation and legislation is important

Until the early 2000’s, corporations predominantly focused on growth, above all other business goals. However, sustainability has become an important practice with companies aligning sustainability practices to their business principles.

In Sept. 2015, the UN Sustainability Development Goals (UN SDG’s) were established and consisted of 17 targets that the world could use as basic principles for corporate sustainability initiatives.

“What tends to happen is that corporations are enthusiastic to these UN SDGs but then reverse engineer the corporate targets they already have onto the SDG’s and continue along the same track as before,” said Senior Sustainability Manager at HCLTech James Trebilco.

Industry leaders have been seeking legislation and regulation as supply chains change due to a greater focus on local sourcing to reduce logistics routes, inefficiencies, and cost. Companies are looking for more ways to identify the best supplier to meet both their financial needs and their sustainability targets.

“Without legislations, there is no guidebook for the companies to work by and this can lead to inefficiencies and missed targets costing time, effort, money and carbon emissions,” said Trebilco.

With legislation in place, compliance with overarching principles can guide corporations and their suppliers to foster a streamlined partnership.

How are industry sectors effected?

Most sectors are affected by regulations regarding sustainability, but each one may have a different focus. All sectors have an area where they may be struggling with sustainability practices because they may have differing concerns and can’t always shift to sustainable practices overnight. For example, the sustainability practices for plastics manufacturing and construction companies will have different aspects to them.

“Looking at just the plastics regulation in itself, that is one which is very pertinent for the packaging industry,” said Trebilco. “Any regulations related to disposable plastics would obviously be to something that is an important regulation to address.

“When we look into the automotive or the construction industry, however, plastic is not a very significant concern. For the priorities in these industries, the output of CO2 for concrete is more important.”

Where were we 5 years ago? Where are we now? And where do you think we'll be in the next 2-5 years?

Five years ago, we were just talking about sustainability, according to Trebilco. There weren’t many regulations in place to say if something was or was not sustainable.

“Now at this stage, it’s a discussion of saying, ‘you know, was it sustainable? Yes, you're fine,’” he said. “But there weren't many regulations in place to say if something was or wasn't sustainable.”

The COVID-19 pandemic has thrown a wrench into the plans of sustainability in that it led to management difficulties and slowed down the progress of sustainability work due to supply chain and workforce complications.

Companies are now trying to understand the current needs of the market with leading companies being aware of regulations coming in quickly.

For example, a new French law from 2020 regarding the construction industry says that if a company doesn’t have a certain level of transparency in their system, they will not be allowed to continue selling in the French market.

“I’m trying to highlight to our current clients that they must pay attention to the legislation emerging and be compliant to continue growing your business,” said Trebilco. “And if you don’t move now, you’re going to be behind the times.”

Where we go with sustainability depends on how many people pay attention to new legislation emerging. Large bodies, like the European Environmental Agency and the UN, are bringing mandates and targets for companies over the next decade. However, for large corporations, it is much more difficult to change the practices of the organization to get on the right path for sustainability.

“If you’re a startup, you know the conditions you’re working in and exactly what it is that’s happening, whereas, if you’re a huge operating company with thousands of employees and established supply chains, then it’s much more difficult to make that change,” said Trebilco.

To make the change, companies big and small must start moving as early as possible. Not just to reduce carbon emissions and save the planet, but to also adhere to regulations and keep the business compliant.