Risk management in regulatory compliance

Organisations that embed risk management into their operations are best placed to navigate uncertainty—and seize opportunity. Credit: Gumbariya / Shutterstock

P​​​​​​​ackaging companies today operate in a high-stakes regulatory environment.  

Legislation governing materials, labelling, sustainability, and waste management is evolving quickly, particularly as governments strengthen their environmental and consumer protection frameworks.  

For firms with complex supply chains or multi-market operations, the potential for non-compliance has never been greater. 

But compliance isn't only about avoiding fines or protecting reputation. Managing regulatory risk effectively can boost operational resilience, improve decision-making, and support long-term growth. 

 As such, risk management has moved from the legal department to the boardroom—becoming a core part of how packaging businesses structure themselves for success. 

The first step in managing regulatory compliance risk is understanding where vulnerabilities lie. These vary significantly depending on market, product category, and operational scope—but some common areas consistently emerge across the industry. 

Material selection remains a primary focus. With increasing restrictions on certain plastics, additives, and non-recyclable formats, companies must ensure that their chosen materials are approved in each jurisdiction where products are sold.  

For instance, the EU’s tightening of requirements on packaging recyclability and harmful substances under the proposed Packaging and Packaging Waste Regulation (PPWR) has placed many legacy materials under scrutiny. 

EPR and reporting requirements represent another major area of risk. Extended Producer Responsibility (EPR) schemes are expanding across Europe, North America, and Asia-Pacific, often with highly specific reporting obligations.  

Errors in data entry, calculation of fees, or product categorisation can lead to fines or exclusion from markets. 

Labelling compliance is frequently underestimated. From recycling symbols to health and environmental warnings, incorrect or outdated labels can result in product recalls or reputational damage. Regulatory expectations differ widely—what qualifies as sufficient recycling guidance in Canada may not be compliant in France or South Korea. 

Supply chain transparency is increasingly seen as essential. Packaging firms must understand not only their direct suppliers but also upstream contributors to material content, recycled inputs, and traceability.  

Weak links in the chain can expose a business to liability if a non-compliant material enters circulation. 

Once risk areas are identified, companies must move from reactive checks to a systematised, forward-looking compliance strategy.  

This means integrating risk management into every stage of the packaging lifecycle—from concept and design to sourcing, production, and disposal. 

One effective approach is compliance-by-design. This embeds legal and environmental criteria into the early phases of product development.  

Cross-functional teams, including regulatory, procurement, and sustainability experts, should collaborate to assess regulatory exposure at the outset, reducing the risk of rework or rejection later. 

Digital tools are playing a vital role. Advanced compliance platforms can now monitor changes in regulation across jurisdictions, flag potential non-compliant materials, and streamline the data needed for EPR or environmental audits.  

Such systems reduce human error and free up teams to focus on strategic planning rather than manual tracking. 

Companies are also investing in scenario planning—modelling how future legislation might impact their packaging formats and operations.  

For example, if a country were to introduce a ban on black plastics or impose a minimum threshold for recycled content, how would that affect cost, sourcing, and compliance across SKUs? 

Training and awareness at every level of the business are critical.  

Regulatory frameworks can be technical and fast-changing, but empowering employees with the right knowledge ensures that compliance is maintained across departments and geographies. 

Firms that treat regulatory risk as an innovation lever often outperform their peers. By anticipating change rather than reacting to it, these businesses position themselves to lead in both compliance and sustainability. 

One such example is seen in the approach of multinational packaging suppliers that design all products to meet the most stringent regulatory standards globally, rather than customising per market.  

This “gold standard” approach simplifies production and reduces the risk of market entry delays. 

Transparency is also proving to be a differentiator. Brands and suppliers that can clearly demonstrate responsible sourcing, accurate labelling, and low environmental impact are favoured not just by regulators, but also by retailers, investors, and consumers.  

In a crowded marketplace, regulatory compliance becomes part of the value proposition. 

Cost efficiencies can also emerge from smart risk management.  

Avoiding fines and recalls is one benefit, but so too is reducing waste, streamlining packaging formats, and eliminating materials likely to become obsolete under future regulation.  

Risk-aware design can lead to more durable, efficient, and environmentally friendly packaging solutions. 

Lastly, strong governance around compliance fosters trust. Boards, regulators, and business partners increasingly expect organisations to have documented, auditable systems for managing compliance risk.  

Those that can demonstrate maturity in this area often gain access to new partnerships, procurement opportunities, and public tenders. 

The regulatory landscape for packaging will only grow more complex as sustainability pressures mount and cross-border trade becomes more interconnected. Managing compliance risk is no longer a peripheral activity—it is a strategic enabler. 

Packaging companies that treat regulation not as a barrier but as a catalyst for better business practices will find themselves more agile, resilient, and respected in the eyes of stakeholders.  

By integrating compliance into core operations, leveraging digital tools, and building risk-aware cultures, these firms are not just avoiding the next fine—they're shaping the future of responsible packaging.