The Carbon Border Adjustment Mechanism (CBAM)
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In this article, we break down what the EU CBAM is, how it works, and what businesses need to do to comply.
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How to navigate ethical standards in a modern world
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In today’s fast-moving business world, keeping up with evolving ethical principles and business ethics isn’t always straightforward. What’s considered responsible or acceptable can shift quickly, shaped by changing social values, new technologies, and global events.
“ Businesses are under pressure not only to meet current standards but also to anticipate where those standards might be heading. What’s considered ethical today could be questioned tomorrow, making it harder to know where the line truly lies. ”
This article explores the challenge businesses face in navigating shifting ethical standards in a rapidly changing business landscape.
Why do ethical standards change?
Ethical expectations in business aren’t fixed, they evolve in response to broader changes in society, technology, and the environment. Here are some of the central forces driving that evolution:
Shifting public values
As consumers become more aware of the impact of business decisions on society and the planet, companies face growing pressure to act. Expectations now reflect not just consumer needs but wider concerns about communities and the environment.
The influence of global movements
Movements like #MeToo, Black Lives Matter, and climate strikes show how quickly ethical expectations shift. Companies are now judged publicly and rapidly for how they respond to evolving social values.
Technology creates new dilemmas
The rise of AI, automation, and data-driven models has introduced fresh ethical concerns - from surveillance to algorithmic bias. As technology evolves, so do the standards for responsible use.
Regulation is catching up
As social pressure grows, regulation is following. Laws like the EU’s GDPR and human rights due diligence rules are turning soft expectations into hard requirements, raising the bar for all companies.
“ Ultimately, ethical standards change because the world changes. Environmental crises, geopolitical shifts, and cultural movements can all reshape what’s expected of businesses, often faster than companies are prepared for. Staying ethical today means staying alert to those changes, not just reacting after the fact. ”
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Examples of business practices that are now under ethical scrutiny
Many once-standard business practices are now viewed as unethical across different aspects of corporate governance, from labour conditions to data handling. Here are a few examples of corporate norms that were widely accepted not long ago but have since come under fire:
For decades, investing in fossil fuels was a part of a sound financial strategy. Oil and gas stocks were viewed as stable, profitable, and essential to powering the global economy. Today, those same investments are being scrutinised for their contribution to climate change and environmental degradation.
Institutions like Harvard University and Norway’s sovereign wealth fund have committed to divestment, driven by climate science and public pressure. What was once mainstream is now, for many, considered incompatible with responsible investment principles.
Institutions like Harvard University and Norway’s sovereign wealth fund have committed to divestment, driven by climate science and public pressure. What was once mainstream is now, for many, considered incompatible with responsible investment principles.
In the early 2000s, outsourcing manufacturing and production to low-cost countries was seen as a savvy business move. Labour rights were rarely questioned, and cost savings often came at the expense of transparency. But high-profile incidents, such as the Rana Plaza factory collapse in 2013 and recent forced labour investigations in countries such as Malaysia, have changed that. Today, brands are expected to know exactly what’s happening across their supply chains and to take responsibility when things go wrong.
Until recently, a lack of diversity in leadership teams was rarely seen as an ethical issue. Many companies operated with executive boards and senior management composed almost entirely of white men, without much scrutiny. Today, a homogeneous leadership team is often viewed as a red flag.
Companies are increasingly held accountable for systemic inequalities in hiring, promotion, and representation - including around race, gender, and sexual orientation - and not just for appearances, but because diversity is seen as integral to fairness and good governance.
Companies are increasingly held accountable for systemic inequalities in hiring, promotion, and representation - including around race, gender, and sexual orientation - and not just for appearances, but because diversity is seen as integral to fairness and good governance.
There was a time when collecting and monetising user data, often without full consent, was standard practice in tech. But public trust eroded quickly in the wake of scandals like Cambridge Analytica, and today, privacy is a defining issue for digital ethics.
Regulations like GDPR and growing consumer expectations have made transparent data practices - including how information is collected, stored, and intended to be used - a key marker of ethical credibility.
Regulations like GDPR and growing consumer expectations have made transparent data practices - including how information is collected, stored, and intended to be used - a key marker of ethical credibility.
“ These examples show how fast business norms can change, and how easy it is for once-acceptable practices to fall out of step with ethical expectations. For companies, keeping up with current standards isn’t enough; staying alert to where expectations are heading next is just as important. ”
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Industry-specific ethical considerations
While some ethical expectations apply across the board, such as transparency, fairness, and environmental responsibility, different industries face unique pressures and risks. Understanding these nuances is key to addressing the most relevant concerns in your sector.
Here’s a snapshot of common ethical considerations by industry:
| Industry | Key Ethical Issues | Examples of Risk Areas |
|---|---|---|
| Fashion & Retail | Labour practices, supply chain transparency, environmental sustainability | Sweatshop labour, fast fashion overproduction, unsustainable materials |
| Technology | Data privacy, algorithmic bias, misinformation, ethical use of AI | Surveillance, lack of consent in data collection, deepfakes, disinformation |
| Finance & Investment | Responsible investing, climate risk disclosure, social impact of lending/investments | Fossil fuel financing, greenwashing in ESG funds, discriminatory lending practices |
| Food & Agriculture | Animal welfare, fair labour, environmental degradation, responsible sourcing | Deforestation for palm oil, pesticide use, exploitation of migrant workers |
| Energy & Utilities | Emissions reduction, community impact, just transition | Fossil fuel reliance, land displacement, failure to invest in renewables |
| Healthcare & Pharma | Access to medicines, clinical trial ethics, pricing transparency, public health outcomes | Unethical testing practices, inflated drug pricing, unequal access to treatment |
| Transport & Logistics | Emissions, working conditions for drivers and warehouse staff, environmental impact of operations | Supply chain emissions, labour rights in gig economy, noise and air pollution |
| Media & Communications | Freedom of expression, misinformation, content moderation | Platform bias, spread of fake news, failure to protect vulnerable groups from online harm |
| Hospitality & Tourism | Cultural sensitivity, over-tourism, water waste, and strain on local resources, local economic impact, fair labour | Damage to heritage sites, exploitation of local communities, unsustainable water or energy use |
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What happens when companies fall behind?
Failing to keep up with shifting ethical standards can have real financial, legal, reputational, and operational consequences. As stakeholder expectations rise, companies that lag behind are increasingly held to account.
Here are some of the most common consequences of inaction:
Public backlash can unfold quickly, especially when issues gain traction on social media. A single misstep, or failure to act on emerging concerns, can lead to boycotts, negative press, and long-term damage to brand credibility.
A clear example came in 2020, when Boohoo faced widespread criticism after an investigation found workers in its UK supply chain being paid as little as £3.50 an hour in unsafe conditions. Major retailers dropped the brand, and Boohoo lost over £1 billion in market value within days of the report’s release.
Consumers are increasingly value-driven, especially as expectations around the ethical role of companies in public life continue to rise, and trust can be hard to rebuild once it’s lost.
Investors want to see companies aligned with stakeholder values, not just shareholder interests. ESG-minded investors are paying closer attention to how companies manage ethical risks. Falling behind on environmental or social standards can lead to divestment, shareholder activism, or lower ESG scores, all of which can affect access to capital and share price performance.
For example, AkademikerPension, a Danish pension fund, terminated a DKK 3.2 billion contract with State Street Global Advisors over ESG misalignment. Similarly, Dutch pension fund PME publicly criticised BlackRock over its insufficient climate action and placed its €5 billion mandate under review.
As regulation catches up with public sentiment, ethical lapses can also lead to legal consequences. Companies are increasingly being asked to provide a clear document trail showing how environmental and human rights risks have been identified and addressed.
New laws, such as the EU’s Corporate Sustainability Due Diligence Directive, will require companies to ensure supply chains operate in accordance with environmental and human rights legislation or risk legal consequences. Non-compliant companies could face fines of up to 5% of global turnover and lose access to public contracts, turning ethical oversight into a material financial risk.
Employees increasingly want to work for organisations whose values align with their own - and where they feel respected by both leadership and colleagues. Ethical missteps, or a lack of transparency, can lead to internal dissatisfaction, higher turnover, and difficulty attracting talent. Customers and service users, too, are more likely to walk away from brands that don’t reflect their values.
According to a 2022 survey by Blue Beyond Consulting, 80% of U.S. and Canadian workers say it's important that their personal values align with their employer’s values, and nearly half would consider leaving if they didn’t.
How companies can stay ahead of ethical expectations
To safeguard their reputation and ensure long-term success in a rapidly shifting landscape, businesses must go beyond reactive compliance. Staying ahead of ethical expectations means embedding ethics into the fabric of the organisation through strategy, culture, leadership, and continuous learning.
Here are our top tips for companies looking to stay one step ahead:
Proactive ethics management
A future-ready approach to ethics starts with being proactive, which means identifying risks early, setting clear expectations, and ensuring everyone understands their role in upholding them.
Define a clear ethical framework
Establish well-defined values and clear guidance that shape informed decisions and consistent conduct across the organisation. Ethics shouldn’t sit in a silo – they should be woven into corporate strategy, policies, and operations.
Deliver ongoing ethics training
Regular training across all levels of the organisation reinforces expectations, clarifies grey areas, and ensures that employees have the appropriate knowledge and skills to handle ethical challenges with confidence.
Create open communication channels
Employees should feel safe asking for advice, raising complaints, and engaging in open discussions concerning ethical issues. Anonymous reporting mechanisms, transparent follow-up procedures, and a no-retaliation policy are key. Ideally, this is overseen by an internal ethics committee to ensure concerns are handled fairly and consistently, with accurate records maintained.
The role of leadership
Those in positions of authority play a defining role in setting the tone for ethical behaviour across the organisation. Senior leaders are expected to act not just in the company’s interest, but on behalf of its broader social responsibilities. When leaders lead by example, it sends a powerful message across the organisation.
Model ethical behaviour from the top
Executives and senior managers must consistently demonstrate integrity in their decisions and interactions, setting the tone for the entire organisation and modelling safe and effective practice across teams.
Hold leadership accountable
Ethics should be part of leadership KPIs. Senior teams must be evaluated not just on financial performance, but also on how they uphold the company’s values and promote ethical, transparent professional practice among all members of the organisation.
Building an ethical culture
Creating a values-driven culture isn’t about one-off initiatives, it’s about what happens every day in teams, processes, and decision-making, where each person within the organisation is treated with fairness, respect, and dignity.
Engage employees in shaping ethics
Allow staff to contribute to the development and refinement of ethical policies. When people feel ownership and autonomy, they’re more likely to uphold the standards.
Adaptability and continuous improvement
Ethics evolve alongside public expectations and the standards of each profession. Companies that remain curious, flexible, and willing to learn are better positioned to keep pace with change.
Monitor trends and research risks
Stay informed about developments in regulation, societal expectations, and sector-specific risks (as well as any other requirements that may impact ethical or operational practices) through benchmarking, conferences, continuing professional development, and engagement with industry networks and public bodies – all of which support the capacity to anticipate and respond to future ethical challenges.
Continuous improvement
It's good practice to review and adapt ethical policies regularly to reflect new challenges, technologies, or market conditions, with each current revision aligned to both internal values and external expectations. Missteps will happen; what matters is how companies respond.
“ By implementing these strategies, businesses can do more than simply avoid ethical pitfalls, they can lead the way. A proactive, adaptable approach to ethics helps build trust with stakeholders, protect long-term value, and ensure the organisation remains relevant in an increasingly values-driven world. ”
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What about Greenly?
Sustainability has become one of the most urgent ethical concerns for businesses today, and getting it right requires more than just ambition. At Greenly, we help companies take control of their environmental impact with a comprehensive suite of carbon management services.
Our services include:
- Full carbon accounting: We assess Scope 1, 2, and 3 emissions using accurate, real-time data tailored to your industry and operations.
- Actionable reduction plans: We help you create clear, tailored strategies to help you reduce emissions, aligned with science-based targets.
- Supply chain engagement: We help you identify and work with more sustainable suppliers, increasing transparency and reducing Scope 3 emissions.
- Lifecycle assessments (LCA): Our LCA capabilities allow you to analyse the full environmental impact of your products, from raw materials to end-of-life, and make data-driven design and sourcing decisions.
- Regulatory and reporting support: From CSRD to SECR and beyond, we help ensure you’re ready for evolving sustainability disclosure requirements.
Whether you’re just getting started or working toward ambitious decarbonisation goals, Greenly gives you the tools and expert support to turn climate commitments into measurable action. Get in touch today to find out more.
Sources:
- Greenly, What is Extinction Rebellion (XR) and what do they do?
https://greenly.earth/en-gb/blog/ecology-news/what-is-extinction-rebellion-xr-and-what-do-they-do?utm_source=adwords&utm_medium=ppc&utm_campaign=1:%20SN%20|%202:%20Brand%20|%203:%20Search%20Brand%20google%20|%204:%20FR - Greenly, Fossil fuels: pros, cons and alternatives
https://greenly.earth/en-gb/blog/ecology-news/fossil-fuels-pros-cons-and-alternatives?utm_source=adwords&utm_medium=ppc&utm_campaign=1:%20SN%20|%202:%20Brand%20|%203:%20Search%20Brand%20google%20|%204:%20FR - Greenly, Climate change in 2022: where do we stand
https://greenly.earth/en-gb/blog/ecology-news/climate-change-in-2022-where-do-we-stand?utm_source=adwords&utm_medium=ppc&utm_campaign=1:%20SN%20|%202:%20Brand%20|%203:%20Search%20Brand%20google%20|%204:%20FR - The Conversation, Harvard’s decision to ditch fossil fuel investments reflects changing financial realities and its climate change stance
https://theconversation.com/harvards-decision-to-ditch-fossil-fuel-investments-reflects-changing-financial-realities-and-its-climate-change-stance-167868 - Green Economy Coalition, World’s largest sovereign wealth fund divests from coal
https://www.greeneconomycoalition.org/news-and-resources/worlds-largest-sovereign-wealth-fund-divests-from-coal#:~:text=In%20May%202015%2C%20Norway's%20conservative,made%20headlines%20around%20the%20world. - The New Yorker, After Rana Plaza
https://www.newyorker.com/magazine/2013/05/20/after-rana-plaza - AP News, Labor migrants in Malaysia and Bangladesh face challenges
https://apnews.com/article/labor-migrants-malaysia-bangladesh-japan-749864c6c2dfc19aff8969e3882d0527 - Bipartisan Policy Center, Cambridge Analytica controversy
https://bipartisanpolicy.org/blog/cambridge-analytica-controversy/ - EUR-Lex, General Data Protection Regulation (GDPR)
https://eur-lex.europa.eu/eli/reg/2016/679/oj/eng - The Guardian, Boohoo Leicester factory conditions during COVID-19
https://www.theguardian.com/business/2020/jul/06/boohoo-leicester-factory-conditions-covid-19 - Greenly, ESG investing: meaning and trends
https://greenly.earth/en-gb/blog/company-guide/esg-investing-meaning-and-trends?utm_source=adwords&utm_medium=ppc&utm_campaign=1:%20SN%20|%202:%20Brand%20|%203:%20Search%20Brand%20google%20|%204:%20FR - Financial Times, ESG investing trends and challenges
https://www.ft.com/content/ac825fec-e1d2-486c-bb6b-26537a52eff6 - Greenly, The Corporate Sustainability Due Diligence Directive (CSDD)
https://greenly.earth/en-gb/blog/company-guide/the-corporate-sustainability-due-diligence-directive-csdd?utm_source=adwords&utm_medium=ppc&utm_campaign=1:%20SN%20|%202:%20Brand%20|%203:%20Search%20Brand%20google%20|%204:%20FR - BBC Worklife, Are workers really quitting over company values?
https://www.bbc.com/worklife/article/20220223-are-workers-really-quitting-over-company-values
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