The 5 most important compliance trends and challenges for 2022
Organizations face new compliance challenges every year as the compliance landscape changes more often than ever. By tackling these challenges, dedicated teams and individuals can help businesses continue operations uninterrupted, save a fortune by avoiding fines, and remain present in the marketplace.
The way we approach compliance has also evolved. In order to be compliant and not waste too much time or money on it, companies are constantly researching new methods of compliance - these methods eventually become trends when they prove useful.
In this article we give an overview of the latest developments in the field of compliance, the challenges they pose for businesses and the trends they follow.
Environmental, social and governance compliance
Compliance with environmental, social and governance (ESG) regulations is becoming more stringent every year - particularly the environmental aspect, as companies need to pay more attention to their environmental impact.
Many new commitments were discussed at the last United Nations Climate Change Conference and regulators have been quick to adopt them as new guidelines for business. In 2022, we expect businesses to pay even more attention to environmental due diligence, which is becoming a priority for stakeholders and regulators alike.
In the EU, the Environmental Due Diligence Directive pushes various compliance measures, including:
- Measurement of waste generation
- Use of sustainable natural resources
- Environmental pollution assessment
- Assessment of greenhouse gas emissions
- Evaluation of deforestation
Of course, we have only listed a few actions, but the list also includes biodiversity assessment, ecosystem assessment and much more.
The guidelines put in place by the GDPR require companies to be proactive and not just reactive. Instead of just focusing on reducing pollution, waste and other negative environmental impacts, companies need to explore new ways to make them more sustainable, raise awareness of environmental impacts, look for alternative production methods and more.
Data protection and data safety
As the world continues to move towards full digitization, it is only natural that more data will be collected, processed and used in some way. We live in a world where almost all of our household devices can connect to the internet and send/receive data. So it's only natural that regulators are pushing for even stricter data protection regulations.
Regardless of the industry you're in, some part of your business is likely already involved with data, and this trend is set to intensify by 2022. Developing a comprehensive privacy program will therefore help you stay ahead of the challenge.
But how can you set up such a plan? A company could hire a data protection expert to assist them with all data protection issues and to help them comply with regulations, and who is in constant contact with a data protection authority.
Here is a list of tasks for which an external data protection officer is responsible:
- Regular training of your employees on the subject of data protection
- Conduct frequent privacy audits
- Creation of all necessary documents
- Keep in touch with the data protection authority
- Provide useful advice for senior management and other professionals
Alternatively, a company can also train an employee in data protection by providing them with the necessary knowledge and assigning them the role of internal data protection officer.
The main benefit of such an approach is that this person already knows how your business works. In addition, she knows the employees of your company well and can communicate with them more easily. Unfortunately, there are also some downsides as the company has to invest enough time and money into training the chosen person to focus on their new role and relinquish their previous duties.
Market surveillance focuses on investigating and preventing illegal, manipulative or abusive practices in the market. It also carries out an inspection of the goods entering a given market. In the case of the EU, market surveillance authorities work closely with other initiatives, such as B. ESG compliance, respect for human rights, supply chain due diligence and more.
As more and more companies choose to conduct their business online, we can see the rise of the e-commerce market, which has been the focus of market regulators lately. It is a complex area and regulators are doing their best to ensure that all practices of participants in the e-commerce market are compliant with various market and cybersecurity regulations.
Failure to comply with market surveillance directives issued by European regulators could mean the end of your distribution of goods in the EU as it is a significant market. As a result, companies in the EU (but also in other parts of the world) face an increasing challenge to comply with market requirements and regulations.
Human rights due diligence
The observance of human rights is not new - it has been around for decades. As with the environment, companies need to take a more proactive approach to human rights, rather than waiting to act when violations are reported.
In other words, they must recognize, prevent, mitigate and account for the harm caused by human rights violations. Conducting due diligence is increasingly becoming the basis for setting up appropriate systems and processes related to human rights and their impact on business.
The use of technology in compliance
As businesses around the world transition to digital ways of working, the use of technology is inevitable. This is especially true when it comes to compliance, because being compliant takes more effort than it used to - there are more things to consider and new policies are issued frequently.
Using the right software to stay on top of your compliance issues will become even more important in 2022, especially when it comes to data privacy compliance. It's a good idea to implement unified software to keep all data protection documents in one place, train your employees on the subject, and even audit customers.
The heyData platform offers a great way to secure data protection documents and train employees to ensure compliance when your organization is in the sphere of influence of the GDPR.
Be one step ahead to stay competitive
Policies and regulations are becoming increasingly complex, and it's more important than ever to stay on top of things. With growing demands for privacy and security, ESG, market surveillance and more, organizations need to find a reasonable way to be compliant and stay in the market.
Failure to do so can result in a range of penalties including:
- High fines
- An import ban can be imposed if human rights have been seriously violated.
- A poor public image in the media due to unethical practices
- Exclusion from public sector support programs, government grants or government procurement
- Exclusion from the EU market (or any other market with standards that your company does not meet)