Beyond Compliance 2024

Beyond Compliance: Embedding Impact through Innovative Finance8In today’s business environment, corporations are increasingly confronted with a complex range of challenges, from driving growth in a constantly evolving business landscape to navigating a new set of regulations under heightened scrutiny related to sustainability and social issues. As a result, companies are compelled to rethink their roles within society and how their business practices should be reshaped to reflect this. This chapter details emerging challenges for companies – from upcoming regulations or other pressure points – and how these can be turned into strategic opportunities to unlock value by engaging in social impact initiatives. How social impact can shape the corporate agenda FIGURE 2 Corporate and supply chain financing solutionsInnovative philanthropyProduct and service opportunities Talent and skillsRisk management and compliance How social impact can shape the corporate agenda 1.1 Risk management and compliance Corporations face increased scrutiny with new regulations that raise the standards on how companies address social issues. For example, the recent enactment of the CS3D in the EU represents a substantial step towards stricter oversight of human rights issues in supply chains. EU companies found to have human rights violations in their supply chains could face fines of up to 5% of their revenue.9 Other, similar regulations include the Chinese Due Diligence Guidelines for Responsible Mineral Supply Chains, the German Supply Chain Due Diligence Act, the Dutch HREDD Law, the Mexican Forced Labor ban, the UK Modern Slavery Act, the Uyghur Forced Labor Prevention Act in the US or the Modern Slavery Act in Australia to name a few. The exposure is significant: according to the International Labour Organization, an estimated 21.3 million people were living under forced labour conditions in 2021.10 Research by Walk Free indicates that over $460 billion worth of goods potentially linked to forced labour are imported annually into G20 nations.11 Furthermore, according