The global economic and power structure is changing, conflicts in Southeast Asia and Europe are becoming more acute.
Dealing with and preventing possible trade sanctions has become one of the most important tasks of compliance officers in large corporations within a year.
36 percent of those surveyed see the sanctions as a risk for their employer, significantly more than a year ago.
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And for the first time ever, compliance managers, most of whom come from North America and Europe, name geopolitical tensions (17 percent) as an important aspect of rule and law abidance.
This is the result of the annual "Global ESG, Compliance & Risk Report" by the consulting firm Boston Consulting Group (BCG), which will be published this week and is available to the FAZ in advance.
Cyber security top priority
"Our study shows that economic and trade sanctions are gaining in importance as an instrument in the context of geopolitical tensions," says Katharina Hefter, who is jointly responsible for the report in Germany.
Specifically, individual conflicts – as can currently be observed in Europe – could lead ad hoc to a higher number and complexity of sanctions.
In addition, the continuous hardening of the fronts between larger economic regions results in a constantly higher intensity of sanctions across sectors and countries, says Hefter.
In her opinion, this also increases the internal responsibility of the department.
"Compliance departments have to take a very differentiated approach here in complying with sanctions regulations, combating attempts to circumvent sanctions and positioning themselves in the context of the different fronts."
Also focus on business ethics
The top spots in the BCG survey remain unchanged compared to 2021.
Furthermore, the topic of cyber security, including data protection, has the highest priority for compliance in their own company for almost two thirds of those surveyed.
This is followed by corporate ethics (52 percent) and digitization at 42 percent, as well as compliance with statutory environmental, social and corporate governance (ESG) regulations.
According to the authors of the study, the latter has long since become a central component of the compliance culture across all regions, industries and company sizes.
Julia Gebhardt, co-author of the report, reports that many companies have already taken measures to adapt their structures to the upcoming regulatory obligations, such as the Supply Chain Act (LKSG) that will apply from January 2023 and the planned, more far-reaching EU-wide requirements .
"As part of the LKSG, for example, companies must appoint a dedicated human rights officer who is responsible for risk monitoring, reports regularly to management and serves as the central contact for the supervisory authority," explains Gebhardt.
This requires intensive cooperation between different areas such as compliance, law, human resources, purchasing and IT.
But the approach can be worthwhile.
"As we hear from our international clients, they want to use their implementation experience as a template for their international ESG strategy."