Automated Compliance Processes Take Hold at Multinational Companies

In today's fast-paced and highly regulated global environment, multinational companies face an ever-growing array of compliance requirements. These demands come from a variety of sources, including national governments, international organizations, industry-specific regulations, and internal corporate governance standards. As businesses expand across borders, the complexity and scope of compliance obligations multiply, making it increasingly challenging to manage them effectively. This is where automation steps in as a crucial tool for establishing compliance and mitigating risk.

The growing complexity of compliance

Multinational companies operate in diverse regulatory landscapes. What might be compliant in one country could be a violation in another. The sheer volume of regulations across jurisdictions—ranging from data protection laws like the General Data Protection Regulation (GDPR) in Europe to the Sarbanes-Oxley Act (SOX) for publicly traded companies in the U.S.—means that companies must continuously monitor, understand and implement a vast array of requirements. Manual systems and processes that many firms have relied on in the past are no longer adequate to address these compliance obligations.

Marc Hobell, director and general manager of ESG software at UL Solutions explains, "Each country has its own set of rules, and the complexity can be overwhelming. Without automation, it's nearly impossible to keep up with the constant changes and maintain compliance."

The role of automation in compliance

Automation tools have become essential in managing compliance in global organizations. By automating routine compliance tasks, companies can reduce the risk of human error, establish consistency across all operational areas and free up resources for more strategic activities. Automated systems can monitor regulatory changes in real time, update internal policies accordingly and help all parts of the organization adhere to the latest standards.

With automation, companies can track regulatory changes instantly and adjust practices across all regions. This not only supports compliance but also allows firms to act swiftly, avoiding potential fines or reputational damage.

Automation also facilitates the standardization of compliance processes across different jurisdictions. For example, a centralized ESG compliance management system can verify that all subsidiaries follow the same procedures for data protection, financial reporting or environmental regulations, regardless of their location. This not only enhances compliance but also improves efficiency and reduces costs.

Mitigating risks through automation

One of the biggest challenges for multinational companies is mitigating the risks associated with non-compliance, which can include financial penalties, legal action and reputational harm. Automated systems can provide early warnings when a compliance issue arises, enabling companies to address potential problems before they escalate.

Automation allows organizations to proactively identify and mitigate risks. The ability to generate real-time reports and audits helps them stay a step ahead in maintaining compliance.

Furthermore, automation can help companies maintain a comprehensive audit trail, which is essential for demonstrating compliance to regulators. This is particularly important in industries with stringent reporting requirements, such as finance, pharmaceuticals and energy.

The Future of Compliance Automation

As regulations continue to evolve, the role of automation in compliance will only grow. Emerging technologies like artificial intelligence (AI) and machine learning (ML) are poised to take automation to the next level by enabling predictive analytics, which can anticipate regulatory changes and compliance risks before they occur.

"The future of compliance lies in predictive analytics,” says Hobell “By leveraging AI and machine learning, we can move from a reactive approach to a proactive one, not just meeting but anticipating compliance requirements."

For multinational companies, the adoption of automation is no longer a luxury — it's a necessity. As regulatory environments become more complex, the ability to swiftly and accurately manage compliance across multiple jurisdictions will be a key differentiator in the marketplace. Companies that embrace automation will not only reduce their risk of non-compliance but also gain a competitive edge by operating more efficiently and effectively.

ESG automation is indispensable for global multinational companies striving to meet compliance requirements. It offers a scalable solution to the challenges posed by diverse regulatory landscapes, minimizes risks and positions companies for future success in an increasingly regulated world. 

Learn more about how UL 360 ESG and Sustainability, available through ULTRUS™ software from UL Solutions can help with automated ESG compliance capabilities for transparency and efficiency.