09/02/2024

Public regulation is necessary to ensure that responsible business does not lose its competitiveness

Jaakko Mattila

Author

Jaakko Mattila
Sustainable Business Development Specialist

Responsibility and sustainable development are becoming increasingly significant factors as EU regulation tightens. Regulation is needed to steer the market economy towards the goals of sustainable development. However, it is important to understand that responsibility reporting is not just an obligation; it can bring many benefits to businesses.

Responsibility and sustainable development are two sides of the same coin. Both emphasize taking responsibility for the impacts of one’s actions. The perspective can include global value chains, climate change, the sufficiency of natural resources for future generations, the well-being of one’s workforce, responsible partnerships, or administrative transparency. The most important thing is to understand the impact of one’s actions—not just in terms of euros but also in terms of lives.

The investigations required by EU regulations are a welcome, balancing move because without understanding, one cannot take responsibility, at least not consciously and systematically. Therefore, it was concerning to read that the EU legislative proposal regarding the responsibility of large companies is in danger of failing at the last minute.

Applying the principle of due diligence in corporate mergers

Due diligence, a principle long used in mergers and acquisitions, involves thorough examination. In large transactions, every contract, customer relationship, and employee’s competence is scrutinized to determine the company’s total value as accurately as possible. Due diligence is also practiced in every company on an annual basis, in both accounting and financial statements. Attention to the financial impacts, as well as their causes and consequences, has been taken very seriously over the decades.

Has there been a more careless attitude towards environmental and social impacts? Has it been assumed that as long as money flows, good will come without further scrutiny? Fortunately, widespread activities whose effects are not understood are no longer accepted. With the new and ever-deepening EU legislation, hopefully, a thorough examination of impacts will become a legally mandated, compulsory activity.

The diverse benefits of responsibility reporting

Although initially reacting to new regulations may sting a bit, responsibility offers more carrots than sticks. Through responsibility assessment, the impacts of operations are firmly anchored in reality—not just in the numbers on a financial report.

A company that can justify the positive impact of its operations can also convince new talents of the significance of its activities. Customers, on the other hand, are convinced of the excellence of operations when new innovations are systematically developed to create life-enhancing features—not just to squeeze out additional euros.

Systematically towards the future

At Elomatic, we do not intend to stand by as the world rushes towards a new era. Instead, we are accelerating the pace of sustainable development. We have already acquired a new information system to help us report according to the new ESRS standard. We are also conducting a materiality analysis to identify the most essential responsibility themes in this rapidly evolving field.

Furthermore, we have initiated discussions between Elomatic’s experts and the responsibility team. Our engineers are not solving responsibility and sustainable development challenges for the first time; work has been ongoing for years, and now we are bringing together many successes. Processes and methods are not formed by individuals’ performances in projects but by systematic collaboration.

From data to innovation

Understanding is an important starting point for the careful examination of impacts. The reporting wave caused by the EU is particularly important for a company like Elomatic because a large part of our impacts is tied to our ability to influence our customers’ operations. Thus, our customers’ reports deepen our understanding of their challenges.

I look forward to what the future holds with the progress of responsibility regulations. Hopefully, the wave of innovation in the coming years will be as high as the tsunami of reporting!

About Us
Responsibility

We want to act sustainably and ethically. Elomatic is an important operator in its field and we play a key role as a social influencer and developer of our industry.

Our objective is to be a responsible partner and to design solutions that increase environmental and human well-being. As a well-established company, we have the means to operate long-term to promote this objective.

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