What are the benefits of an environmental management system in the face of stricter sustainability regulations?

Regulatory obligations and stakeholder expectations for corporate sustainability work have grown rapidly in recent years. The number of legally obligated companies is also gradually growing in Finland, but the indirect effects are already spilling over to a larger group of companies through the global value chain. Even if a company is not required to report in accordance with the directives, the transition in sustainability work will inevitably be reflected in every company’s competitiveness.

It also pushes organisations to develop their sustainability work, for example, in connection with competitive tendering or funding applications. Yet, navigating the landscape of sustainability regulations can feel challenging, to say the least. Many companies now need support to get started and develop their own sustainability work or to understand the effects of their obligations.

ESRS, CSRD, CSDDD, EU Taxonomy? All the regulations are interrelated

While the ESRS-based Corporate Sustainability Reporting Directive (CSRD) places emphasis on corporate disclosure and operational transparency, the EU Taxonomy sets criteria for sustainable financing and determines which business operations can be classified as sustainable. As for the Corporate Sustainability Due Diligence Directive (CSDDD), it places emphasis on minimising negative impacts on human rights and the environment and helps companies to meet the requirements of the CSRD. Each directive is based on the UN Guiding Principles on Business and Human Rights and the OECD Guidelines.

If a company already complies with the directives, it has a strong foundation for sustainability work. Meeting the requirements of the sustainability regulations obligates companies to identify risks and promote material sustainability issues. The reporting itself requires a great deal of data collection, as well as diligence in collecting and verifying it. However, the importance of sustainability work is greater than the practice of reporting or meeting legal requirements. While legislation lays the foundation for corporate sustainability, it is crucial for sustainability to be integrated into business strategy and practices.

Identify your organisation’s environmental impact

Pioneering companies already know that corporate sustainability is not just isolated actions but an organisational culture-based holistic understanding of the impact the business operations have and how the company can contribute to creating a better environment for future generations. With the development of environmental responsibility, companies have to consider the root causes of the organisation’s environmental work and its promotion.

A company can start its development work by considering the impact and significance of its business operations for:

It is clear that no environmental action is too small or insignificant, but the importance of environmental actions varies depending on the organisation and business in question. For this reason, the relevant themes, objectives and development targets for environmental responsibility vary from company to company. It is, therefore, important for a company to identify the significant environmental risks and opportunities associated with its operations. Risks and opportunities depend on the company’s industry, scope of operations and geographical location.

Environmental management system as a support tool

There is no need to try to figure out the processes of sustainability work alone. Various environmental management systems provide effective tools for developing the organisation’s environmental work and sustainability competence. For example, WWF Green Office tools require an organisation to assess and report on its environmental impact, set targets and monitor progress.

WWF Green Office’s Climate Calculator can be used as part of the organisation’s emissions reporting and supplemented with the necessary data points, allowing the report to be used as part of financing negotiations, for instance. Theme-specific environmental targets can, in turn, be used as part of sustainability reporting and as a verification of the organisation’s environmental work. They can be based on the requirements of the directives, for example, regarding climate change or the use of resources.

An environmental management system also enables companies to act as a part of the value chain. With a high starting level for environmental work, the company is more prepared to adapt to future regulation, directly or indirectly.