Sustainability work has also risen to the center stage in small and medium-sized enterprises (SMEs). Regulation targeting large corporations, stakeholder expectations, and customer demands quickly ripple through entire value chains. From an SME entrepreneur’s perspective, the situation can feel confusing: how to keep up with the pace and what exactly is expected from my company?
The Goal of Sustainability Work
The goal of sustainability work in an SME is simple: to support business and promote sustainable development. In practice, this means considering three dimensions in everyday operations – environment, economy, and people.
When sustainability is closely tied to a company’s values and core business, it becomes a factor that strengthens competitiveness rather than an administrative burden. For example, energy and material efficiency generate savings, good HR policies improve employee retention, and customers who value responsibility are more likely to choose your company.
What Is the VSME Standard and What Does It Mean for SMEs?
VSME (Voluntary Standard for non-listed Micro, Small, and Medium-Sized Enterprises) is a voluntary reporting framework for SMEs developed on the European Commission’s mandate. Its aim is to reduce the chaos of data requests targeting SMEs and to provide a common framework for reporting sustainability information.
The standard is intended to limit ESG data requests directed at SMEs and bring more consistency to sustainability reporting. The starting point for its development has been the demands of financiers and the pressure on SMEs that arises indirectly through value chains from large corporations. In other words, SMEs and their practical needs have not been the main focus. This has led to a framework that is impractical and disconnected from SME reality, and poorly suited for its stated purpose.
The VSME standard emphasizes broad sets of data points that do not necessarily support or encourage SMEs in concrete sustainability actions. It does not support the strategic development of sustainability work but instead leans on formulaic reporting of partly irrelevant issues. VSME also fails to provide practical tools for a company’s sustainability development.
CSRD and the Omnibus – What Should SMEs Take into Account?
Although most SMEs are not covered by the Corporate Sustainability Reporting Directive (CSRD), its impacts extend widely through value chains. Large customers and financiers require information from SMEs, which makes sustainability work relevant also for those companies not directly subject to the law.
The European Commission’s Omnibus amendments restrict sustainability reporting obligations to even larger companies. For SMEs, this means that obligations do not directly increase, but the quality and consistency of disclosures are becoming increasingly important. Omnibus also reinforces the message that smaller companies do not need to strive for perfection in reporting; it is sufficient that sustainability work is proportionate to the size of the business and communicated clearly.
What Should an SME Do Right Now?
Start with a Current State Assessment
Every company is already doing some form of sustainability work – knowingly or unknowingly. The first step is to pause and assess where you stand. Käkikuu´s free self-assessment form offers an easy way to map the current state. It quickly highlights what is already being done well and where there is room for improvement.
Conduct a Double Materiality Analysis
Without materiality, sustainability efforts easily remain superficial. A double materiality analysis helps identify which sustainability topics most affect the business, andwhich issues the company itself significantly impacts from the perspective of the environment and people. For SMEs, this analysis is an excellent tool because it directs attention to what truly matters.
Select Focus Areas and Metrics
Not everything can or needs to be done at once. Choose a few key focus areas – for example, reducing energy consumption, improving employee well-being, or sourcing more responsibly – and define clear metrics for them.
Make a Plan and Progress Step by Step
Sustainability work does not advance in leaps but through consistent, suitable steps. Create a planthat includes concrete actions, schedules, and responsibilities. This builds credibility and makes the work transparent for stakeholders.
Communicate and Report Clearly
An SME’s sustainability report does not need to be complicated. It is enough to clearly state what the company does, why it does it, and what results have been achieved. The most important things are openness and communication that reflects the company’s identity. Käkikuu´s sustainability handbook and reporting services provide accessible support for this.
What Benefits Do SMEs Gain from Systematic Sustainability Work?
When sustainability work is done as part of business, SMEs can gain many concrete benefits, such as:
- cost savings in energy and material use
- a more attractive employer brand and better employee retention
- improved opportunities in tenders and procurement processes
- easier access to financing
- better risk management and strengthened reputation
- innovation and the development of new business models
So, it is not just about obligations or image – sustainability is a prerequisite for the long-term competitiveness and viability of SMEs.
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