Doing good or just following rules?

Sustainability and corporate responsibility have become essential aspects of modern business. But is this drive to be more sustainable rooted in a genuine desire to do good, or is it simply a reaction to increasing regulation and customer demands? For many companies, sustainability is a value-driven choice that reflects a commitment to the well-being of the people, environment and society. On the other hand, stricter EU sustainability reporting requirements, such as the CSR Directive, compel companies to act, even if their primary motivation may not be entirely voluntary. Is corporate responsibility and sustainability more effective when it springs from a company’s internal culture, or is regulation the only way to achieve tangible change? And what about economic growth and sustainable development — two cornerstones of business that are often at odds?

Traditional thinking has long emphasized that economic growth requires the intensive use of natural resources and sometimes the full capacity of human talents, leading to environmental degradation and workforce strain. Nowadays, however, many companies strive to balance economic development with sustainable practices, seeking an equilibrium between business efficiency and securing the foundations of a good life. Can companies grow responsibly, or does true sustainable development require giving up certain financial goals?

The Dutch author and historian Rutger Bregman has explored in his book ‘Humankind – A hopeful history’ (Hyvän historia in Finnish), whether humans are fundamentally good or bad. His conclusion — backed by a compelling amount of evidence — is that we are inherently good; that human nature includes community spirit and a fundamental capacity to act for the common good. So, people are naturally inclined toward goodness. Regarding ESG, this is evident in at least two ways: through employees’ initiatives and commitment to sustainability measures, and through job seekers’ appreciation — companies that are genuinely sustainable are more attractive as workplaces. People who want good wish to be on the side of the good. But what about companies? Business activities are always driven by human actions, values, and choices. Although companies often appear as faceless systems of management structures, supply chains, and processes, at their core, they are fundamentally based on human action, cooperation, and trust. For companies, sustainability means, above all, building trust by committing to actions that enhance the well-being of the environment, customers, communities, and individuals.

At times, EU regulations can feel like micromanagement, but in the realm of sustainability, this oversight is highly welcomed. Not only does it push companies to operate with genuine responsibility and eliminate practices of greenwashing, social washing, or marketing-based pseudo-sustainability, but it also makes corporate sustainability measurable and comparable. Starting in 2025, the EU’s Corporate Sustainability Reporting Directive will apply to selected medium-sized companies too. According to the directive, companies must report on environmental impacts, social responsibility, and governance practices based on a model defined by the European Sustainability Reporting Standards (ESRS).

Finance and ESG

Even though sustainability comes with a price tag, there seems to be a connection between sustainability and good financial performance too. Former Governor of the Bank of Canada, Mark Carney, says that “ESG is not about philanthropy; it’s about risk management.” By this, he means that ESG is linked to a company’s long-term success.

This claim is also supported by facts: A study (The Comprehensive Business Case for Sustainability) by Harvard Business Review found that companies that prioritize sustainability outperform their peers in the long run, particularly in financials like sales growth, return on assets and return on equity. Another study (MSCI ESG Research) found that companies with higher ESG ratings face lower capital costs, indicating that investors perceive them as less risky.

The EU’s sustainability reporting requirements will apply to Prohoc in 2026, marking the beginning of our journey under the watchful eye of the EU “big brother.” However, we see ourselves as having already committed to ESG efforts for quite some time. And we have already started our journey to CSRD compliancy. In addition, a strong, value-based culture of care and responsibility has been an essential foundation for us and a key competitive advantage. The owner’s desire — for a company we can truly be proud of — has long guided our approach. We want to be on the side of the good.

The CSRD will introduce more comprehensive metrics for us. Carbon footprint calculations and other significant data points are valuable metrics we are currently developing. We also believe it is essential for our ESG program to focus on meaningful actions rather than unrealistic targets. Too many companies have had to retract ambitious ESG goals and sustainability pledges due to insufficient analysis of actual capabilities and genuine commitment to sustainability.