Businesses across Europe are facing a barrage of regulation that touches everything from carbon emissions and sustainability reporting to product traceability and supply chain due diligence.

New rules — including the Carbon Border Adjustment Mechanism (CBAM), the Packaging and Packaging Waste Regulation (PPWR), the Cyber Resilience Act and the first Digital Product Passports, to name but a few — will place new obligations on those businesses that make, move and sell goods across the region.

They may all be EU rules, but their impact extends far beyond the bloc’s borders. Which means that any business that operates in the European market or forms part of an EU supply chain will increasingly be affected.

But as anyone who is impacted by these new rules knows, compliance is not just about legalities. It’s about having the visibility, control, and traceability needed to prove that products, processes, and supply chains meet increasingly stringent requirements.

Compliance starts with operational visibility

Not only can this help those in the supply chain meet their compliance obligations, it can also unlock efficiencies and reduce risk, thereby delivering real competitive advantage. And it’s a role at which modern enterprise resource planning (ERP) excels.

This is reflected in recent IDC research, which found ERP is becoming increasingly central to organisations managing sustainability and regulatory obligations. A survey of firms based in the distribution sector found that eight in ten businesses will be impacted by UK and EU sustainability reporting directives.

One unnamed CEO from the wholesale and distribution sector is quoted as saying: “The final straw for our ERP modernisation decision was that new sustainability regulations created a raft of new data requirements we needed to meet.

“It’s simply not something you can manage in a spreadsheet. You need dynamic data tools that help trace emissions and other data. That’s the only way to meet sustainability requirements effectively, efficiently, and with minimal chance of errors,” they said.

So how, exactly, does ERP — a technology more commonly associated with orders, inventory and operations — help businesses tackle an increasingly complex compliance challenge?

You can’t manage what you can’t see

First, it provides visibility. After all, you cannot manage what you cannot see. For many operators, the information they need is spread across multiple systems.

Supplier records, for example, may sit in procurement platforms; product information in engineering systems; quality data in specialist applications; and operational data on the factory floor.

In some cases, critical information may still be managed through spreadsheets and manual processes.

The issue is rarely a lack of data. More often, it’s that critical information is scattered across disconnected systems, making it difficult to build a complete picture or answer increasingly complex compliance questions.

Which suppliers contributed to a particular product? Where did the raw materials originate? What packaging was used? What emissions are associated with production? Which batches were affected by a quality issue?

Why governance matters as much as data

But visibility is only part of the equation. Businesses also need confidence that the information on which they rely is accurate, consistent and up to date. This is where control becomes critical.

Consider the challenge of sustainability reporting, product traceability, or supply chain due diligence. If supplier information is incomplete, quality checks are bypassed or documentation is stored inconsistently, then coming up with the right answers is almost impossible.

Control means embedding governance into everyday processes, ensuring supplier information is captured consistently, approvals are recorded, mandatory quality checks cannot be bypassed, and documentation is stored in a standardised way. Compliance becomes part of normal operations rather than a separate exercise carried out at audit time.

And finally, businesses need traceability. Regulators, customers, and auditors want to know where materials originated, which suppliers were involved, what production processes were followed, which quality checks were completed, and how products moved through the supply chain.

Building compliance into everyday operations

Meeting these requirements becomes significantly more difficult when information is fragmented across multiple systems or maintained through manual records. Building a clear and auditable chain of evidence can quickly become a time-consuming exercise.

Modern ERP systems help address this challenge by creating a digital record of business activity as it happens. Rather than relying on staff to reconstruct events after the fact, organisations can maintain detailed records of transactions, approvals, quality checks, supplier interactions, and production activities as part of normal operations.

This creates a robust audit trail that allows businesses to answer a simple but increasingly important question: Can you prove it?

With a raft of new legislation coming down the line, businesses are understandably focused on the immediate challenge of compliance. Those that have already invested in modern, cloud-based ERP systems should be able to take it in their stride.

For those still reliant on legacy systems, spreadsheets, and manual processes, the task may prove to be more of a stumbling block. Either way, those that get it right will find themselves better equipped not only to meet their compliance obligations, but also to unlock new levels of efficiency, resilience, and competitive advantage.