ESG and CSRD- maximising the opportunity and minimising the risk for your company
Environmental, Social and Governance (ESG) reporting is becoming a legal requirement for a growing number of larger companies and will soon be an expectation placed on their SME suppliers. This is required under the new EU Corporate Sustainability Reporting Directive (CSRD), as part of the European Green Deal.
This presents both a risk and an opportunity for SMEs in the supply chain of larger companies or government agencies. EcoMerit is working to provide our member companies with the tools to remove the risk and maximise the opportunity. Interested EcoMerit members should contact Phil Walker.
Key points
ESG reporting will be mandatory for ‘large’ companies meeting any two of the following three criteria:
- An annual net turnover exceeding €50 million
- A balance sheet (assets) exceeding €25 million
- At least 250 employees on average throughout the year
They need to report on their 2024 performance and each year thereafter. By implication, it requires them to investigate the ESG performance of their supply chain.
SMEs (with a small number of exceptions) are not legally required to provide ESG reporting. However, SMEs with large customers will be expected by these customers to provide information on their ESG performance and how they, in turn, monitor their own suppliers. This will trickle down throughout the supply chain. As such while not a legal requirement, many SMEs will find this type of ESG reporting to be good for business.
There is a voluntary EU reporting format for SMEs in draft form at present. It will make huge sense for affected SMEs to adopt this format which, it is anticipated, will soon become the de-facto standard. Early adopters will give themselves competitive advantage.
EcoMerit members are already well-placed to cover the Environmental aspects, which is the most technically demanding part of ESG reporting.
EcoMerit Supports
EcoMerit is putting in place a pilot project to support a small number of Member Companies to achieve the voluntary ESG reporting standard. Interested members should contact Phil Walker for more information. Grant funding support covering most of the associated costs may be available for this project. EcoMerit will assist members in accessing this funding, making participation in the project easy and low cost.
Not an EcoMerit member?
If you are not already a member of the EcoMerit community, check out some of our members stories to see why they find it valuable to be EcoMerit Certified®. EcoMerit members are supported in managing and monitoring the environmental impact of their business which puts them in a perfect position for the type of ESG reporting mentioned above. This is just one of the many benefits of EcoMerit Certification. SMEs may be eligible for a funded project under the Green for Business scheme which could prepare for and significantly lower the cost of achieving EcoMerit Certification.
