Over the past two decades of working with companies across industries, one pattern has become increasingly clear: aligning with international standards on human rights, the environment and good governance is not only the right thing to do—it is also the smart thing to do.
There may be uncertainty about the regulatory landscape, but future-looking businesses continue to embrace sustainability and due diligence as central to long-term competitiveness.
In this article, I share why. Drawing on new data, global trends, and financial insights, I highlight how companies are moving beyond compliance—using standards such as the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises to strengthen resilience, brand value, and investor confidence.
1. Sustainability is a competitiveness strategy
Public debates sometimes frame sustainability as a cost to business. In practice, the opposite is true. Corporate sustainability is increasingly embedded, steadily growing, and driven by business priorities. It is less costly to address our global challenges today, than to pay for the consequences of inaction later.
In a world where businesses and their value chains are exposed to both physical and social risks, sustainability is no longer about “good practice”—it is a strategy for competitiveness and long-term resilience.
And—according to recent data, over 74 % of companies report that sustainability initiatives have a positive impact on brand value.
As the President of the European Investment Bank put it recently: “We see the green transition as a key driver of competitiveness, stability and strategic autonomy.”
2. Nature and people are core business assets
Our climate, environmental and human rights are not abstract concerns. They are core business assets. Harming them pose economic, investor and operational risks. Consider:
- Lloyd’s of London projects a global USD 5 trillion economic loss over five years due to climate-related disruptions to food and water supply.
- European farmers are already losing more than EUR 28 billion annually from climate change—most of it uninsured.
- Within five years, the equivalent of 80 million full-time jobs may be lost each year due to heat-related productivity declines.
- Investor sentiment and valuation are increasingly shaped by perceptions of fairness—for example, concerns over excessive executive pay relative to average workers.
In my work with multinational companies, I see the same pattern: ignoring these risks is no longer viable. Integrating human rights and environmental responsibility is becoming key to ensure business resilience.
3. The rule of law: an overlooked enabler
In today’s turbulent political climate, the importance of strong rule of law is sometimes underestimated. Yet it underpins everything: legal certainty, innovation and investments – all prerequisites for competitiveness.
Data published in the Harvard Business Review shows that populist leaders, both left and right, largely fail to deliver on their economic promises. Equity returns drop the longer right-wing populists are in power, while inflation rises under both left and right populist governments.
For businesses, this means risks to credit and currency stability, hiring and retention across political divides, and investor confidence.
Or, put more simply: there is a clear business rationale for standing strong on democracy and the rule of law. As Draghi puts it: “If Europe cannot any longer deliver these values for its people, it will have lost its reason for being”.
4. Resilience through due diligence
The UNGPs and OECD Guidelines are often framed as compliance tools. But they do much more. They improve performance and resilience.
They:
- Define due diligence as a continuous, risk-based process—not an one-off, show-off exercise.
- Are flexible and adaptable across sectors, sizes and geographies.
- Focus on accountability, not just transparency—asking companies to address issues, not simply document policies.
- Distribute responsibility across value chains, clarifying how to use leverage, and how to engage suppliers.
- Provide an effective framework for the global and cross-sectoral collaboration that is urgently needed in today’s interconnected economy.
In my experience, the companies that take these standards seriously are better equipped to spot systemic vulnerabilities early—and to build credibility with stakeholders when it matters most.
5. What the data shows: benefits outweigh costs
Evidence from early adopters of regulation is clear: aligning with international standards supports business outcomes.
- An independent review of Norway’s Transparency Act found that companies consider the requirements both clear and beneficial.
- Research shows that applying the CSRD led to strong learning and innovation effects, especially for SMEs.
- Compliance with the EU Deforestation Regulation is by one report estimated to cost only 0.10 % of revenues—while maintaining forests strengthens supply chain resilience and reduces long-term risk.
The conclusion: the benefits of risk-focused regulation far outweigh the costs.
6. The bigger picture: what kind of business do you want to be?
As the EU Clean Deal and disparate global sustainability agendas unfold, companies face a choice:
- Do you want to be seen as a leader or a laggard?
- Do you want to be proactive or reactive?
- Do you want to remain competitive in the long run?
This is not just about compliance in a familiar world. It is about shaping the economy we want in a changing world.
In sum: from standards to strategy
Companies that embrace international standards as part of their core strategy—not just legal compliance—will be better prepared, more resilient, and more attractive to stakeholders across the board.
This is not only a regulatory moment. It is a strategic business opportunity. Let’s not waste it.
