by Anneleen Wydooghe
Sustainability is playing an increasingly important role in our society. New European sustainability directives, such as the Corporate Sustainability Reporting Directive (CSRD), require companies to report on the impact of their activities on people, society and the environment (Environmental, Social, Governance or ESG). Indeed, from 2025, all listed companies and public interest entities will have to report on their 2024 financial year.
The deadline of 2025 may seem far away, but make no mistake: the impact of CSRD is widespread and spans the entire value chain. As a result, not only large companies, but also their suppliers and partners - you as an SME or self-employed person - will have to adapt. We are all moving towards more sustainable business practices. This has many benefits, but implementing such new policies can be a complex challenge for many companies.
To find out how SMEs look at sustainability and corporate social responsibility, we conducted a survey among our clients.
The results show that around 20% of SMEs do not (yet) know what ESG stands for. ESG, an acronym for Environmental, Social and Governance, refers to the criteria used to assess whether and how sustainable and socially responsible a company is doing business.
The first step is to create a collective awareness of the importance of ESG. And there already is one: 80% of SMEs say they consider sustainable and socially responsible business practices important. But this collective awareness will only bear fruit in the company if policies and objectives are aligned. And this is where the problem lies. Most SMEs report that ESG is important, but in many places this priority has not yet been translated into concrete action. The survey shows that 75% of SMEs have not yet formulated ESG objectives and 80% do not have a dedicated ESG officer or use external help to learn more.
The survey results suggest that those that have formulated ESG objectives have done so relatively recently. For example, a third of companies have had them for less than a year.
The impact of sustainable business practices is huge, both for society and for the company itself. More and more investors are looking at business practices from a sustainability point of view and making their capital investments contingent on it. Talent is also increasingly looking at the extent to which a company acts ethically for people and the planet. It is therefore essential to put sustainability high on the agenda, not only for your reputation but also for your company's revenue. With a strong ESG reputation, you can attract investors, suppliers, grants or public tenders more easily. This in turn makes your company more attractive on the labour market, which also increases customer loyalty.
If you want to make your business futureproof, you should not put off setting ESG targets. Doing business sustainably also ensures that you are alert to challenges and ready to reinvent yourself as a business if necessary. In fact, by prioritising ESG, you will be prepared for long-term risks and save costs. ESG prepares you for the future.
It is also a unique opportunity to professionalise some strategic decisions and take a critical look at where you want to go as a company.
Finally, it is simply the right thing to do: building a business is not something you do just for the next few years, it is also for the next generations.
We want to make SMEs aware of the importance of sustainability goals, because the impact of a sustainable policy is still too often underestimated. Many companies are unaware of the impact ESG has on the prosperity of their business, or they are aware of the potential impact but do not know how to start reporting. This is what we want to change at Vandelanotte.Anneleen Wydooghe , Sustainability Expert, Vandelanotte
You should know that you are not alone. At Vandelanotte, we understand the considerations of SMEs like no other. We have the experts in-house to guide you as an SME when you can no longer see the forest through the trees.
Specifically, Vandelanotte can help you to:
Review your current sustainability policy;
Translate the action plan into concrete KPIs;
Guide you through the obligations associated with the CSRD Directive;
Following this, we can also guide you through the data collection and drafting of the sustainability report;
- Finally, we can review the report to ensure that it complies with the CSRD framework.
ESG should be your focus, but you don't have to figure out the 'how' and the 'what' on your own. Vandelanotte has the skills and tools to take a close look at your organisation and reporting.
In our opinions, we rely on current legislation, interpretations and legal doctrine. This does not prevent the administration from disputing them or from changing existing interpretations.
Read our latest insights and news releases to stay abreast of changes in your industry.