The bigger picture: sustainability remains essential

Large companies and governments continue to prioritise sustainability, with both direct and indirect consequences for SMEs. Legislation such as the California Climate Disclosure Regulation highlights the growing importance of transparency regarding environmental impact. This law requires large companies to report their emissions (Scope 1, 2, and 3), including data from their suppliers. Such requirements are becoming a global trend, meaning SMEs are increasingly asked to provide insight into their environmental impact.

For SMEs, this presents not only challenges but also opportunities. Transparent reporting is becoming a prerequisite for collaboration with larger clients and can also offer a competitive edge. By addressing these developments now, SMEs can prepare themselves, stand out, and strengthen their position in a market that increasingly values sustainability and accountability.

The CSRD and what it means for smaller businesses

In Europe, the CSRD (Corporate Sustainability Reporting Directive) requires companies to be transparent about their climate and societal impact. A recent survey revealed that 70% of businesses feel well-prepared for this regulation. Interestingly, 40% of SMEs are already working on the CSRD, even though it does not yet officially apply to them. However, another 40% of SMEs admit they are poorly prepared.

Some tips to start preparing for CSRD are:

• Conduct a sustainability analysis to understand your impact and identify areas for improvement.
• Research sector-specific requirements relevant to your business.
• Use tools like Eevery to simplify reporting, measure progress, and ensure compliance with CSRD standards.

A lack of preparation can have significant consequences, as SMEs are increasingly required to provide CSRD-related data to their larger clients. Initiatives such as CSRD-DAY2 demonstrate a growing need for support among SMEs. By taking timely action, they can seize the opportunities that sustainability offers and ensure their long-term viability.

What are the CEO's of multinationals doing?

The focus on sustainability through regulation impacts entire organisations but is actively driven by leadership. CEOs play a crucial role in this shift.  Research shows that CEOs remain committed to their climate strategies but are changing how they communicate. They focus less on lofty promises and more on concrete actions and results. For SMEs, this provides a valuable lesson: clear communication about sustainability initiatives builds trust with customers and partners.

Even small steps towards sustainability can make a significant difference. Transparent communication makes SMEs more attractive as partners for larger clients with sustainability requirements. By actively sharing these initiatives, SMEs can enhance their credibility and better meet the growing demand for sustainable practices.

Why SMEs must act now

While much of the regulation is aimed at large companies, it also affects SMEs through supply chains. Large clients increasingly require their suppliers to meet sustainable standards. This means smaller businesses must anticipate stricter requirements and regulations. Sustainable practices not only provide a competitive advantage but also contribute to the long-term resilience of the business.

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Sustainability is no longer a choice; it is a necessity. By acting proactively, SMEs can meet these standards, seize new opportunities, and build trust with customers and partners. It’s not only good for the planet but also essential for the future of your business. Start your sustainability journey today and discover how Eevery can support you! Get in touch with us now.