Sustainability as a driver of innovation: DACH region leads the way

Companies from Germany, Austria and Switzerland are setting new standards in the implementation of European sustainability regulations - primarily thanks to their high level of digitalization and automation. The new study "The State of Sustainability Reporting in Europe" of the software company osapiens shows that 88% of the companies surveyed in the DACH region already use digital solutions to implement regulatory requirements, a third (29%) of which are even fully automated. In all other regions (Nordics, Spain, France, Italy, Benelux), this proportion is 9%.

This technological lead is paying off: 85% of the companies surveyed in German-speaking countries believe they are now ready to meet the new requirements of the Corporate Social Responsibility Directive (CSRD) and the EU Supply Chain Directive (CSDD). Across Europe, the figure is only 41 percent. Automation improves data quality, speeds up evaluations and increases legal certainty.

Regulation as a driver of innovation

Despite ongoing discussions about sustainability regulations, around 97% of DACH companies currently see regulatory requirements as a driver of innovation and competitiveness. This is significantly more than in any other region in Europe (82 percent). 

The report is able to show where reporting pressure has provided innovation impetus. 65% of respondents were able to improve their product developments as a direct result of ESG requirements, while 64% reported more efficient processes. 63 percent benefit from better market positioning. Many German-speaking companies therefore clearly see regulations as an opportunity for the future.

Data access and quality determine success

Despite their digital lead, many DACH companies face structural challenges when it comes to data management: 41% report a lack of integration between ESG and financial reporting, while 36% still record relevant key figures manually and in a time-consuming manner. Added to this are regulatory complexity (35%), a lack of real-time transparency (34%) and problems with data quality (29%).  

Even if the willingness to digitize is high, many companies still lack the necessary basis. 38% of DACH companies see the fragmentation of their ESG data across various internal and external sources as the biggest challenge. 33% complain about a lack of specialist expertise, while 31% struggle with the integration of automated ESG solutions into existing systems. For 29 percent, high implementation costs represent an additional hurdle.  

Digital maturity gives companies a clear competitive advantage. In the DACH region, 92% of companies keep an eye on their impact along the supply chain - across Europe, only 61% of companies manage to do so. This makes technology a key factor for transparency and the regulatory ability to act.

DACH remains flexible even with new requirements

The DACH region shows strength not only in existing requirements, but also in dealing with regulatory dynamics. The planned EU omnibus initiative is assessed differently. 38% of the companies surveyed see it as an opportunity to reduce regulatory burdens and simplify ESG reporting obligations. At the same time, 34% see the initiative as a new source of uncertainty. Despite this divided assessment, many DACH companies feel that they are generally well equipped (85%). By comparison, the average across Europe is only 41%.

"Digitalization determines regulatory success"

"The DACH region shows impressively that those who invest in technology at an early stage are not only compliant from a regulatory perspective, but also have a strategic advantage," explains Alberto Zamora, CEO and co-founder of osapiens. "Automation, platform thinking and central data strategies are the key to not only meeting the constantly growing requirements, but also to gaining a real competitive advantage." 

This article originally appeared on m-q.ch - https://www.m-q.ch/de/nachhaltigkeit-als-innovationstreiber-dach-region-fuehrend/