EthicsTalk LIVE on advancing sustainability in the midst of regulatory and political uncertainty
This blogpost summarises the key takeaways from the EthicsTalk LIVE on advancing sustainability in the midst of regulatory and political uncertainty on March 6th, 2025. The panelists included Pontus Selderman, SVP, Legal and ESG Regulatory, Stora Enso and
Salla Tuominen, Head of Corporate, DLA Piper Finland. More information on the panelists on the event page.
More questions than clear answers
In today’s rapidly changing business environment, companies are grappling with numerous uncertainties. When we add the push and pull with the regulation, such as e.g. current EU’s Omnibus Regulation regarding certain proposed corrective measures to the sustainability regulation of CSRD and CSDDD which have not yet even been fully implemented on national level, we are left with a host of questions and challenges. What will happen next? What is the timeline for these changes? Are the steps we’ve taken so far correct, or will they end up being discarded? These are the pressing questions that many companies are facing, leading to a state of understandable confusion.
One significant area of focus has been Diversity, Equity, and Inclusion (DEI). This topic has been at the forefront of discussions, not just recently, but for quite some time. There have been setbacks in DEI initiatives, particularly related to gender movement topics, and these challenges are not confined to the United States, similar “development” has been seen also in some European countries. We’ve seen a peak in these issues recently, and it’s intriguing to observe how companies are responding to the demands for DEI.
Some large companies have publicly withdrawn their support for certain DEI-related matters, while others remain steadfast in their commitment to their principles. This divergence in approaches highlights the complexity of the issue. DEI requires a dedicated system, and it’s clear that companies are still figuring out how to navigate this landscape.
A year ago, voluntary commitments to principles like the UN Global Compact and ILO standards were becoming hard law. Now, it seems we are reverting to a period of soft law, which, while confusing, is not entirely new. Companies that have always respected human rights and fair business practices are finding that, in principle, nothing has changed. However, the shift back to soft law has shaken the business community, as the clarity provided by hard law is now in question.
The role of legislation in these areas is crucial. While some argue that regulation is necessary to ensure fair competition and protect public interests, others believe that over-regulation can stifle innovation and create administrative burdens. The key is finding a balance between necessary regulation and allowing companies the flexibility to innovate and thrive.
It should be noted, that sustainability and compliance trends are cyclic. After a period of intense focus on one area, a reaction often follows. In the United States, there has been a significant focus on DEI, while in Europe, sustainability and environmental issues have been at the forefront. This cyclical nature means that reactions and changes are to be expected.
DEI, in particular, is a highly political issue in the U.S., often used as a weapon in cultural wars. The Supreme Court’s 2023 ruling that anti-discriminatory campaigns can be discriminatory themselves has fueled this debate. This ruling, coupled with political movements, has turned DEI into a scapegoat for various issues, from safety problems to infrastructure failures. In Europe, the focus has been on sustainability regulation in general, regulatory barriers and economic development.
Boardroom focus
In boardrooms, the discussion around ethics, compliance, and sustainability should also evolve. Boards want precise data and concrete progress, but these topics are inherently complex and difficult to distill into simple KPIs. The challenge is to provide meaningful data without oversimplifying the issues. Boards need to focus on long-term strategy and values, rather than getting bogged down in the minutiae of reporting points.
Ultimately, the role of leadership in ensuring compliance and maintaining ethical business practices is fundamental. Leaders set the tone for the company culture, and their actions must align with their words. Empowering employees at all levels to take responsibility for ethical decisions is crucial. This bottom-up approach can create a strong, values-driven culture that withstands external pressures and regulatory changes.
In conclusion, navigating the current business landscape requires balancing. Companies must stay true to their values, adapt to regulatory changes even if quick and not always logical as a whole, and empower their employees to make responsible decisions. By doing so, they not just ticking the box in compliance requirements but thrive in these uncertain times.
If you want more of the same topic, make sure you watch the webinar recording from Nordic Business Ethics’ YouTube channel.
