| 28.01.2025

How do EU sustainability regulations affect Finnish companies?

There are significant differences in how prepared Finnish companies are to comply with EU regulations on corporate responsibility. This is shown by a new study conducted by several Hanken researchers, among others, on behalf of the Ministry for Foreign Affairs.

By interviewing Finnish companies in the agri-food, forestry, mining, and textile sectors, the researchers have identified several challenges. These include a reactive approach to sustainability, confusion regarding regulations, conflicting requirements and uncertainties about resource allocation.  

– The study clearly shows that among the biggest concern for Finnish companies is not overregulation, competitiveness, or GDP, but the uncertainty created by the EU. This includes the risk that important goals within the EU's Green Deal and the green transition may be lost. If companies cannot rely on long-term strategies, there is a risk that they will continue with a reactive sustainability strategy, which is already a major problem, says principal investigator Nikodemus Solitander from Hanken School of Economics. 

According to the report, well-prepared firms express confidence in their readiness but are concerned about their suppliers' ability to meet the regulatory requirements. 

– To improve sustainability practices and navigate the EU's complex regulatory landscape, we recommend, among other things, more collaboration within value chains, the establishment of cross-functional task forces, and clearer communication, says Solitander. 

The CEULA project (Cumulative Effects of EU Sustainability Legislation: Impacts on Finnish firms) aimed to investigate the cumulative effects of five EU sustainability regulatory instruments on large Finnish firms and their global value chains.  

The report was written by Hanken researchers Nikodemus Solitander, Martin Fougère, Heidi Herlin, Neema Komba, Amin Maghsoudi together with Dorothée Cambou (University of Helsinki), Mikko Rajavuori (University of Turku), Elina Sagne-Ollikainen (Åbo Akademi University), and Juho Saloranta (University of Eastern Finland). 

The study specifically analyses the following regulations: the Regulation on Deforestation-free Products (EUDR), the Directive on Corporate Sustainability Due Diligence (CSDDD), the Carbon Border Adjustment Mechanism (CBAM), the Regulation on Prohibiting Products Made with Forced Labour (FLR, and the Ecodesign for Sustainable Products Regulation (ESPR).