The Future of Compliance for Industrial Facilities
For industrial facilities, staying compliant is no longer about staying out of trouble. The real question for them is: Are we ready for what’s next?
In recent years, outdated compliance practices have resulted in heavy financial costs for industrial companies. Businesses sticking to traditional checklists have faced profound consequences, such as reputational damage and operational delays for failing to adapt to new environmental reporting standards.
In 2024 alone, for example, global companies faced regulatory fines worth $19.3 billion. In the United States, the Environmental Protection Agency (EPA) has implemented extensive enforcement across sectors such as petrochemicals, mining and manufacturing. Meanwhile, governments worldwide implement regulations focused on sustainability, safety and ethical operations, each with different frameworks and timelines. Keeping up with these laws has become even more mission-critical for some sectors. Market leaders will implement practices that not only address regulations but that transform their operations. In this blog, you’ll learn how these organizations are shifting to more strategic approaches in order to achieve compliance while also strengthening their general practices and processes.
The Shift from Static to Strategic
Europe’s Carbon Border Adjustment Mechanism (CBAM) and the upcoming Corporate Sustainability Due Diligence Directive (CS3D) have significantly affected global supply chains. For example, with increase costs for high-carbon imports under the CBAM, producers outside the EU face higher costs for their goods. The CBAM will also require robust data management systems and strategies to comply with its reporting requirements; it may be crucial to take an enterprise-wide approach to meeting these types of requirements. Additionally, the strategic shifts that will likely need to be taken with respect to CS3D may include new sourcing strategies to meet sustainability requirements and climate change transition plans. Besides that, in North America, ISA84 is being revised into a new standard, PSCAI, to redefine how safety systems are applied in process industries, inclusive of functional safety measures, digital information integration for timely collection, analysis and visualization of safety data, and a lifecycle approach to safety that covers activities from design through operation and maintenance. Across East and South Asia, countries such as China and India are tightening solid industrial waste and plastic recycling laws. Many of these regulations aim for more safe and sustainable business practices but they will also compel organizations to make a significant shift in their operations and data strategies.
The requirement for industry-related compliance interconnects with every part of operations, from procurement and supply chains to workforce safety and emissions management. For non-compliant companies, this can mean canceled contracts, export prohibitions and even serious health and safety incidents.
Why Traditional Methods Are Falling Behind
Manual processes such as spreadsheets, disconnected systems and paper-based records might have worked in the past, but today they create gaps. With regulations constantly changing, periodic audits and disconnected workflows cannot keep up. Modern compliance requires ongoing risk monitoring, automated reporting, audit readiness and integrated operations across teams. Yet many companies remain reactive.
Some Examples of What Future-Proof Compliance Looks Like
- Real-time monitoring: Deepwater Subsea transitioned from manual audits using HxGN SDx® and j5 Operations Management Solutions. These solutions cut its reporting time by 95%, reduced compliance errors and centralized all compliance records.
- Predictive risk management: PETRONAS launched what they called their PRIME initiative—Predictive Revitalization of Instruments to Maximize Efficiency— to improve safety, reliability and cost efficiency at their sites. After implementing PAS PlantState Integrity™ as part of the initiative, one of its plants reduced alarm rates by 90% and dropped SIF bypasses from 101 to just 7.
- Data-driven operations: Godrej PED achieved compliance in its design workflows with PV Elite®, allowing the company to deliver complex pressure vessels on time without regulatory friction.
- Digital documentation: Biomass Industries Associates used CADWorx® to complete 80% of a refinery design in a single package, meaning fewer errors through real-time access to accurate code-compliant data.
Building Compliance Systems for the Future
Regulations will only grow more complex and interconnected. For industrial facilities to stay ahead, periodic audits will not work. Here is where to start for a future-proof compliance strategy:
- Conduct an end-to-end risk assessment across supply chains and reporting workflows.
- Enable automation through IoT and cloud-based platforms.
- Foster cross-functional collaboration between operations, legal, sustainability and supply chain teams.
- Include Environmental Social and Governance (ESG) readiness to meet environmental and social standards before they become mandatory.
In today’s world, when compliance failures can have long-term consequences, industries must treat compliance as a strategic function rather than a cost center to stay robust.
To learn more about how organizations like yours are leveling up amidst increasing compliance demands, read our e-book, ‘The Compliance Conundrum: How Industrial Facilities Can Stay Ready for What’s Next’.