The landmark regulation will require firms to mitigate their negative impact on human rights and the environment

The European Parliament passed the Corporate Sustainability Due Diligence Directive (CSDDD). This means that the new regulation passed all the EU legislative phases. It is expected to be signed into law by the EU Council this summer, with EU member states given two years to transpose the rules into national laws.

To remain in compliance, companies will need to conduct human rights and environmental due diligence on their own operations, their subsidiaries and their supply chain. This applies to impacts that occur within or without the EU.

Enforcement is scheduled to begin in 2027 for companies with over 5,000 employees and annual turnover of more than €1.5 billion, in 2028 for companies with more than 3,000 employees and €900 million in turnover, and in 2029 for companies with more than 1,000 employees and €450 million in turnover. 

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Our latest survey has exposed a stark reality: 44% of compliance officers and managers feel unprepared for the compliance challenges that lie ahead in 2024. Only 7% feel fully confident in tackling the challenges in the year ahead, signalling a potential industry-wide gap in readiness to address the ever-changing regulatory landscape. 

The survey gathered 212 responses from industry leaders across the UK, USA, Spain and Germany, and gauged professionals’ confidence levels and preparedness in managing compliance issues. The findings underscore a critical need for robust compliance training programs as organisations navigate an increasingly complex regulatory environment. 

Beyond the headline unpreparedness, the survey explored various dimensions of compliance readiness:

1. Fraud Prevention Training

While 27% have implemented failure to prevent fraud training and an additional 27% are planning to do so, a concerning 46% revealed they have not yet rolled out failure to prevent fraud training, are undecided or have no plans to in the near future. This lack of preparation and preventive measures leaves businesses at an increased risk of fraudulent activities.

The new “failure to prevent fraud” offence comes into the UK as part of the Economic Crime and Corporate Transparency Act, which marks a significant shift in how businesses will be held accountable to combat corporate fraud and protect victims. Failure to provide adequate training can leave organisations susceptible to financial losses and reputational damage.

2. CSRD Compliance Preparedness

Only 2% of compliance professionals claimed to be fully prepared for Corporate Sustainability Reporting Directive (CSRD) compliance despite 50,000 companies worldwide being expected to be impacted by it. In comparison, almost half (47%) expressed uncertainty or deemed CSRD irrelevant to their operations.

As 2024 sees the first published reports from many large companies on their CSRD compliance, the global implications will ripple through supply chains, demanding a proactive approach.

3. Neurodiversity Training

In an era witnessing a quadrupling of neurodiversity discrimination cases from 2018-2022, compared to the number of cases from 2003-2017, organisations risk legal repercussions and employee well-being concerns without proactive measures for the fair treatment of neurodivergent employees to create a work environment that values and respects differences. 

Despite these figures, only 8% of businesses polled incorporate neurodiversity training into their yearly programs, and a notable 28% have no plans to do so, potentially hindering the creation of an inclusive work environment and causing an escalation of neurodiversity discrimination cases.

4. Gifts and Hospitality Registers

With 2023 witnessing a nearly quarter-billion pound fine against mining giant Glencore for flying suitcases stuffed with cash to local public officials, getting a handle on gifts and hospitality is crucial for businesses to get right in 2024. Worryingly, when questioned on the types of gift registers in place, 43% of compliance professionals admitted relying on outdated spreadsheets, while 18% admitted to not using any tools for this purpose at all, despite a legal requirement to implement procedures to prevent bribery.

Given the prevalence of digital solutions, the reliance on manual tools poses a risk to accurate and comprehensive compliance tracking. Organisations should consider investing in modern systems and technologies for more efficient and accurate compliance management.

5. Internal Policies on the Role of AI

Finally, the survey explored internal policies on the role of AI. While 23% have established policies, 37% have not considered AI policies in the workplace.

As AI integration becomes more commonplace, organisations must proactively develop and update policies to ensure responsible and ethical use. Neglecting this aspect may expose organisations to legal and moral concerns.

“As the compliance landscape undergoes rapid evolution with various regulations coming into force, this survey reveals a glaring gap in preparedness among compliance professionals,” said Nick Henderson-Mayo, Director of Learning and Content at VinciWorks. “The findings emphasise the critical need for proactive compliance procedures and new initiatives, including training. There are solutions out there for busy compliance professionals, including new technologies and automation. Being prepared is half the battle, and businesses can buffet against global headwinds by investing in proactive compliance and risk mitigation.”

To support compliance professionals in understanding the compliance challenges that lie ahead, VinciWorks is offering a free guide on Compliance Trends 2024.

In a recent study carried out by VinciWorks, a global compliance eLearning provider, 212 compliance professionals were surveyed on Compliance Trends 2024.

2024 is the year of CSRD. The EU’s Corporate Sustainability Reporting Directive (CSRD) is an ESG (environmental, social and governance) is coming into the forefront this year.

It is designed to make corporate sustainability reporting more common, consistent and standardised like financial accounting and reporting. The new directive’s impact is far-ranging and essentially modernises and strengthens the social and environmental information that companies have to report. The directive went into force in January 2023. The first companies will have to apply the new rules for the first time in the 2024 financial year, for reports published in 2025.

Download your free mini guide to how to get your organisation started with CSRD.

Our recent survey exposes a concerning trend among ESG leaders and compliance managers. Despite the enforcement of the European Union’s Corporate Sustainability Reporting Directive (CSRD) in January 2023, a staggering 77% of respondents have yet to commence preparations for CSRD reporting. The survey, which engaged 175 ESG leaders and compliance managers, underscores the urgent need for action in the face of evolving compliance requirements.

The CSRD is new EU legislation requiring all large and listed companies, even some outside of the EU, to publish regular reports on the social and environmental risks they face and how their activities impact people and the environment. It aims to help investors, consumers, policymakers, and other stakeholders evaluate non-financial performance and encourage a more responsible approach to business.

Of those surveyed, 50% acknowledged that their organisations are likely to fall under the purview of CSRD, highlighting the need for prompt compliance. However, only 23% have taken the initiative to commence preparations for CSRD reporting, while less than a third (29%) plan to embark on this journey within the next six months.

Supply chain information emerges as the top concern, with 48% of respondents identifying it as the most significant challenge to CSRD compliance. This is followed by awareness and understanding (28%), and regulatory adherence (10%). Despite these challenges, an overwhelming 89% of ESG leaders and compliance managers recognise the value of implementing sustainability reporting within their organisations.

“The inaugural CSRD reports are slated for submission in 2025. Organisations that prioritise preparation over procrastination are better positioned to enact policies and procedures that ensure seamless compliance,” asserted Nick Henderson-Mayo, Director of Learning and Content at VinciWorks. “Despite Brexit, CSRD will have a big impact on British business, particularly those trying to trade with the EU, or who are part of international supply chains. By training employees on sustainability and ESG principles, awareness can be cultivated, fostering active support for the organisation’s sustainable objectives.”

To facilitate ESG leaders and compliance managers’ comprehension of CSRD, we are offering a complimentary EU CSRD guide and have launched a comprehensive suite of Sustainability training courses, available for free trial.

In a recent study carried out by VinciWorks, a global compliance eLearning provider, 175 ESG leaders and compliance managers were surveyed on CSRD reporting.

Corporate Sustainability Reporting Directive (CSRD) is an ESG (environmental, social and governance) standard enacted by the European Union. It is designed to make corporate sustainability reporting more common, consistent and standardised like financial accounting and reporting. 

The new directive’s impact is far-ranging and essentially modernises and strengthens the social and environmental information that companies have to report. 

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Are you ready to take your sustainability efforts to the next level? 

Watch our on-demand webinar on the Corporate Sustainability Reporting Directive (CSRD) – your guide to understanding sustainability compliance and reporting.

CSRD, a new EU legislation, mandates large and listed organisations to publish reports on social and environmental risks and their impact. Join Gary Yantin, Nick Henderson-Mayo, and Naomi Grossman in this informative webinar, where they unravel CSRD’s complexities and guide you on compliance and reporting strategies.

In this session, you’ll gain an understanding of CSRD, including:

  • A deep dive into CSRD and its origin
  • Step-by-step guidance on CSRD compliance and reporting guidelines
  • Key considerations for both EU and Non-EU businesses
  • Timelines and strategies for preparing your organisation for CSRD

Watch the on-demand webinar today and embark on a sustainable journey with confidence.

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What are the benefits of ESG?

Climate change poses serious risks to companies and not just those with asset-heavy supply chains. Even the most flexible, digital professional services companies may be vulnerable.

Thus, all companies need to understand the risks posed by climate change – as well as the opportunities. Companies that prioritise climate risk management will be better positioned to withstand its effects and capitalise on new opportunities.

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What does an ESG committee do?

Companies around the world are beginning to recognise the importance of having Environmental, Social, and Governance (ESG) policies in place. These policies not only benefit society and the planet but can also lead to financial benefits for companies. From reducing carbon emissions to promoting diversity and inclusion, ESG policies are becoming a key part of any company’s strategy.

What is an ESG policy?

An ESG policy documents how a company is addressing the three pillars of ESG – environmental, social, and governance. This formalised document outlines the company’s ESG commitments, guiding vision on ESG issues, how the business is involved in these issues, and how ESG activities are monitored and reported.

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Engaging today’s employees and attracting tomorrow’s talent – the importance of ESG

Looking around, we see evidence of companies responding to growing environmental, social, and governance (ESG) issues everywhere. Whether it is announcing net-zero emissions targets, closing the ethnicity pay gap, or reducing plastic in packaging.

These efforts are often undertaken to satisfy investor expectations or consumer demand. But another critical stakeholder group mutually benefits with ESG – employees. The key to ESG success, employees are on the frontlines of implementation. What’s more, employees want to work for companies that share their values, making ESG table stakes for talent attraction and retention.

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