INTEGRATING INTERNATIONAL STANDARDS OF SUSTAINABLE DEVELOPMENT AND DIGITAL TRANSFORMATION INTO COMPLIANCE RISK MANAGEMENT

The article examines the essence and features of international standards regarding sustainable development and digital transformation that are applicable within the Eurozone. Specifically, the discussion encompasses the Global Reporting Initiative (GRI), Environmental, Social, and Governance (ESG) standards, Software as a Service (SaaS), the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDD), the General Data Protection Regulation (GDPR), the NIS2 Directive (EU), and the Artificial Intelligence Act (AI Act). These standards significantly influence the emergence of compliance risks in companies' business operations. The authors substantiate the necessity to reconsider existing approaches toward the compliance risk definition by considering the diverse aspects of sustainable development and digital transformation, which have become crucial paradigms for conducting business globally. In addition, the article proposes a mechanism for integrating international standards on sustainable development and digital transformation into compliance risk management procedures. The key distinction lies in viewing compliance risk management through the lens of the organization’s business processes, which include managerial, core (operational), and support operations. In particular, aligning risk management policies with ESG standards and integrating AI tools into the policy of tracking the organization's compliance with regulatory acts and the consequences of compliance risks in company management processes. Ensure adherence to international standards and European Union directives and standards concerning sustainable development and digital transformation at every stage of the value chain within organizational operational processes. Last but not least, to uphold ethical standards within the organization and to cultivate employee competencies in the area of compliance. To sum up, the article outlines the advantages that domestic enterprises may realize through the implementation of the proposed mechanism.