Social Compliance

Changing customer demands, stricter regulations, increasing requirements from investors and stakeholders: The pressure on companies to fulfil ESG requirements (environment, social, governance) is growing. Environmental or social changes give rise to so-called transition risks, which companies should address in a structured manner.

Relevant aspects are human rights, health protection, diversity and corporate values - i.e. socio-cultural aspects. Business practices should be legal and ethically correct and respect the rights of all employees. This includes fair working conditions, no use of child or forced labour, the protection of health and safety in the workplace and the promotion of equality and diversity.

Companies need a transparent view of their entire supply chain and all suppliers involved in value creation, for example with regard to whether they comply with relevant environmental and social standards. For globally operating companies in particular, the challenges are increasing due to complex production conditions and globally interlinked economic activities.

Companies that take a structured approach to social compliance can avoid transition risks, such as the threat of a shortage of skilled labour, and gain competitive advantages. Through ethical practices and responsible behaviour, they attract greater interest from relevant stakeholder groups, increase productivity and perform better on the stock market. Companies with appropriate and effective social compliance receive better rankings and ratings, which can facilitate access to social bonds and improve capital procurement. In addition, higher employee satisfaction leads to lower staff turnover and higher productivity, which reduces operating costs and improves financial performance. More qualified professionals also want to work for such companies.