Corporate sustainability for companies – the path to an ESG-compliant future

We cannot preserve the ecosystems and peaceful coexistence on our planet if we continue with business as usual. Achieving sustainability, with the aim of redesigning the environment, economy and society accordingly, is the key to the future of this planet. Achieving sustainability goals is not only ethically and morally imperative, but also makes economic sense and enables a successful business model. osapiens creates transparency, efficiency and trust along operational value chains and global supply chain processes with its software solutions and aims not only to make companies economically successful, but also to make human rights and ecologically sustainable and responsible corporate governance the global standard. We explain how this can work in our new blog series ‚Corporate Sustainability for Companies‘.

Climate change, environmental degradation and growing social injustice are existential threats to Europe and the world. The European Commission’s ‚Green Deal‘, which came into force in 2019, is a roadmap for action to make Europe climate neutral by 2050, while maintaining and even increasing the international competitiveness of the economy. The overall objective is to embed sustainability in the interplay between environmental, economic and social aspects in European companies and to make the transition to sustainable corporate governance inclusive and fair for all stakeholders. This will be achieved through a combination of measures, including the regulation of supply chains and value chains in European companies.

In recent years, the EU has therefore adopted a large number of ESG regulations that have been or will be transposed into national law. In Germany, the Supply Chain Due Diligence Act (LkSG) came into force at the beginning of this year, initially only applying to companies with more than 3,000 employees and a location in Germany. From 2024, companies with more than 1,000 employees will also have to comply with the LkSG’s catalogue of obligations, meaning that the number of companies subject to reporting requirements will again increase significantly.

Nearly every company in Europe will be affected

In addition, with the Corporate Sustainability Due Diligence Directive (CSDDD),which is to be adopted by the end of 2023, the EU intends to harmonise and significantly expand the national framework conditions for the due diligence obligations of companies in the EU member states. The new EU directive will then have to be transposed into national law by the end of 2025 at the latest, and the German Supply Chain Due Diligence Act (LkSG) amended accordingly. In addition, the Corporate Sustainability Reporting Directive (CSRD), which was adopted in January 2023, and must be transposed into national law by the beginning of July 2024, will significantly expand existing non-financial reporting requirements. All companies listed on an EU-regulated market (with the exception of micro-enterprises) will be affected by the CSRD – around15,000 companies in Germany alone.

 But that’s not all: the EU’s new deforestation-free supply chain regulation, the EUDeforestation Regulation (EUDR), is also due to come into force in mid-2024.This will require companies trading cattle, cocoa, coffee, rubber, soy and wood, and products made from them, to conduct a comprehensive review of their supply chain to ensure that the goods have not recently (after 31 December 2020) been obtained through deforestation, forest degradation or violations of local environmental and social laws. The Digital Product Passport (DPP) will also become mandatory for all goods produced in the EU by 2027 at the latest, heralding the final shift towards a sustainable circular economy, with furtherESG regulations to follow.

It is clear that companies affected by the CSDD, EUDR, CSRD & Co. should take advantage of the transitional periods until the directives come into force to prepare in good time for the new or amended due diligence obligations in the supply chain, not least because the EU wants to introduce civil liability and also extend the sanctions framework.

Corporate sustainability needs digital solutions

In the medium to long term, therefore, almost every company is likely to be affected by the impact of these regulations and laws at various levels – a scenario that poses major challenges for companies and raises a big question: How can the obligations of these laws be fulfilled quickly, in a resource-efficient, simple and, above all, legally compliant manner?

Once again, the answer lies in digitising and automating the relevant processes. To protect human rights and the environment along their supply chains, and to operate in a sustainable and legally compliant manner around the world, companies need to use the latest technologies and software capable of collecting, processing and aggregating large amounts of data for reporting purposes.

osapiens‘ mission is to develop holistic Software-as-a-Service (SaaS) solutions for companies of all sizes and industries that ensure transparency, efficiency and trust along the entire operational value chain. With the help of the ‚osapiens HUB‘, a cloud technology platform based on artificial intelligence and other innovative technologies, the data and information required for compliance with the new ESG laws are collected, standardised and processed. osapiens‘ ambitious goal is to combine software solutions for all upcoming regulations and laws on a national and international level on one platform, thus enabling companies to comprehensively master these laws and to see them not as a challenge and obstacle, but as an opportunity for their own growth.

The ‚osapiens HUB‘ focuses on the areas of ‚Business Partner Transparency‘, ‚Product Transparency‘ and ‚Operations Efficiency‘ and offers a wide range of software solutions that automate the necessary activities and processes as far as possible and make them more transparent. Which solution can be used for which process or law and how the solutions work will be explained in detail in the next blog post: ‘Corporate sustainability for companies – keeping an eye on your business partners’.