Mandatory sustainability: Five legislations impacting operations

Sustainability is no longer a simple nice-to-have or a moral duty.

Businesses of all sizes and across all industries continue to face pressures from employees, investors, and customers alike to ramp up their sustainability investments, with 55% of companies claiming that sustainability is important to them.

In addition to both internal and external scrutiny, various legislations aiming to protect the environment and promote social responsibility are affecting UK operations, too. Making sustainability considerations a legal obligation for businesses operating in the UK, such legislation can significantly impact how businesses operate and compete.

In this blog, we explore five of the sustainability legislations that ought to be on your radar.

The Climate Change Act 2008

The first of its kind, the Climate Change Act is a national law in which the UK government is required to cut greenhouse emissions by 100% by 2050. As part of this Net Zero mission, the government is continuing to introduce legally binding carbon budgets that businesses must comply with.

Additionally, businesses that are subject to the act must report their emissions annually, and failure to do so can result in financial penalties.

The Modern Slavery Act 2015

The Modern Slavery Act requires businesses with an annual turnover of £36 million or more to publish a statement on their website that details the steps they have taken to prevent modern slavery and human trafficking in their supply chains and operations.

With modern slavery and human trafficking often having negative impacts on the environment, such as deforestation, pollution, wildlife trafficking, and climate change, transparency across supply chains is key when it comes to tackling sustainability. Businesses that do not comply can be subject to an injunction or unlimited fines.

The Environment Bill 2020

Passed in 2020, the Environment Bill was set in motion to allow the UK government to set long-term targets related to the natural environment, or people’s enjoyment of it, following the UK’s departure from the European Union.

It introduces legally binding targets for air quality, water, biodiversity, and waste, as well as a new independent watchdog, the Office for Environmental Protection, to monitor and enforce compliance. The bill also includes measures to improve resource efficiency, reduce plastic pollution, and restore nature.

The Green Claims Directive 2021

With an increase in misleading or false environmental claims, also known as greenwashing, the Green Claims Directive aims to ensure that businesses provide clear, accurate, and verifiable information about the environmental impact of their products and services.

It sets out harmonised criteria and methods for assessing and verifying environmental claims, such as carbon footprint, recyclability, biodegradability, and eco-labels. Businesses that make false or misleading green claims can face legal action from consumers, competitors, or regulators.

The Corporate Sustainability Due Diligence Directive 

Currently working its way through the EU legislative process, the Corporate Sustainability Due Diligence Directive (CSDDD) is a proposed legislation that would require businesses operating in the EU or accessing the EU market to conduct due diligence on the environmental, social, and human rights impacts of their activities and supply chains.

The CSDDD would also require businesses to identify, prevent, mitigate, and account for the potential and actual adverse impacts of their operations, ensuring that businesses respect human rights and the environment, as well as promote responsible and sustainable business practices.

Above are just a handful of examples of the sustainability legislations that are currently impacting UK operations.

Sustainability is not only a legal necessity, but also a strategic opportunity for businesses to enhance their reputation, reduce costs, increase efficiency, and create value for their stakeholders. As such, businesses that want to stay ahead of the curve and gain a competitive edge should not only comply with these laws, but also adopt best practices and innovative solutions that go beyond the minimum requirements.

To learn more about ESG regulation and compliance, join our upcoming webinar with David Howe from Jordisk as he delves into the intricate interplay between compliance, governance, and assurance in the context of ESG standards. 

The first of an exclusive series dedicated to sustainability, this webinar will offer insights into effective data management strategies for navigating this evolving landscape.

Register today.