Consumer product companies and grocery retailers are essential businesses that provide critical food products across the world and have built trustworthy relationships with consumers. As major economic drivers with a sizable influence on the environment and the consumption of sustainable products, these businesses absolutely must put their focus on meeting government regulatory and industry compliance standards. With that in mind, what is the role of data in the context of these ever-evolving regulations?

Bold goals, less tangible achievement

In today’s CPG and retail spheres, we often encounter a dichotomy between sustainability goals and their operational execution. Governments and regulators are generating multiple complex legislations in short periods of time, making it difficult to keep up. While there have been bold ESG statements from almost all major corporations, the reality is that understanding and identifying “the starting point” has and continues to require great efforts and highly manual work.

In many cases, there is not an efficient model in place to capture, manage, and report sustainability and compliance data in a highly automated way. Due to reasons like lack of clarity on how to move forward, dependency on other agents in the value chain, and disconnection from necessary investments, companies are struggling to make operational changes that have an impact. Some regulations have been defined from the “desk” without considering the context and circumstances of the industry. The EU, for instance, floated a contentious law to drastically reduce the use of pesticides in farming that met backlash and was retired in February 2024.

A variety of ways to respond

Despite the challenges they face, companies have begun to launch actions to ensure compliance and, even more importantly, a flexible framework for compliance going forward as regulations continue to evolve. These measures have been quite varied, from organisational (such as defining new roles to lead the way (chief sustainability officer, chief legal officer, etc.) and adjusting existing roles to respond to the challenge) to inserting sustainability and compliance elements in core processes to ensure data is captured, validations are executed, restrictions are applied, and reports are created.

Technology is another major angle in corporate compliance game plans. Implementing or fine-tuning a flexible data management platform that can ensure adequate governance, strong integration capabilities to support data and calculations from third parties, and an efficient collaboration framework with suppliers, vendors, and partners is on the radar of almost every organization. The level of implementation is, however, highly variable, as there are “well-known” barriers to a smooth progression: disparate systems, legacy persistence, data silos, etc.

Fair demands coming from the industry

When having open and transparent talks with consumer product companies or food retailers about the impact of this regulatory storm on their organisations, there are three clear demands they state:

  1. Global standards versus regional approaches and requirements.
  2. Reasonable milestones versus unachievable targets.
  3. Active industry participation and input to define the “new way”.

Would these demands result in less ambitious goals? Possibly not. We should take the chance and try it.

Evaluating the starting point

As mentioned, there can be some delays at the starting point. Here are several questions to get started:

  1. Is there a person or department, such as regulatory affairs or compliance, responsible for identifying and assessing regulations as they emerge and develop to determine their potential impact on the business?
  2. Is there a clear framework of responsibilities and accountabilities throughout the organization? New roles, such as the Chief Compliance Officer, need to create adequate collaborative interlock schemes with data management and operational areas, legal, risk, and security, as the core ones, so that compliance processes can be executed as lean and efficiently as possible.
  3. How might your team create a regulatory data plan to link to the overall data strategy and data roadmap to elevate awareness and reduce risk?
  4. Have you created an adequate balance between global and local compliance control and execution?

How to move forward

As we navigate the intricate landscape of regulatory challenges in the consumer goods and retail sectors, reliable data can play a critical role in driving compliance and sustainability initiatives. As companies grapple with the dichotomy between ambitious ESG goals and tangible achievements, we see a growing recognition of the need for efficient models to capture, manage, and report on compliance data, so leveraging data management tools to remain agile in the face of evolving regulations is also key. Avoid creating ad hoc, manual, and disintegrated tools or solutions and promote the use of existing applications or corporate solutions to be implemented that integrate compliance data requirements into business processes and ensure scalability.

Leveraging technology such as master data management can help your organisation implement new governance rules, reduce potentially harmful silos, organise the records to be the single truth, and create data models directly matching the regulatory requirements. By doing so, your organisation will be ready and in compliance, so the business can continue to focus on growth and customer service.