Why is ESG also relevant for SMEs?

Over the past few years, a great deal has been said and written about ESG. That growing attention has also brought certain risks, such as greenwashing, which we explored in more detail in an earlier blog.

But in essence, it is really quite simple: ESG is about how a company interacts with its surroundings, with people, and with the way it is organised. In other words: Environment, Social and Governance.

For many SMEs, ESG still sounds like something that mainly concerns large companies. Yet that is becoming less and less true today. During a recent conversation about sustainability reporting, Kenny Weytens, ESG expert at Isabel, had a clear message for SMEs:

So why does Kenny say that? We explain in this blog.

Many SMEs are already working on ESG without realising it

In practice, ESG is often already part of how SMEs operate and do business. Think for example of:

• trying to reduce energy consumption

• ensuring safety and proper care for employees

• identifying risks

• selecting suppliers carefully

• thinking about the long-term future of the business

These are all forms of sustainability in the broad sense of the word.

So the question is not whether SMEs are already engaging with ESG. Many already are, even if they do not think of it in those terms. The real question is then how they can make those efforts visible in a simple way. Can they communicate about them efficiently when customers, banks or partners ask? And is their information structured well enough to be shared easily?

Why visibility is becoming more important

Even though European reporting requirements have been adjusted in recent times, market expectations have not disappeared.

Large companies still need to assess the sustainability of their value chain. Banks, in turn, can better assess risks by looking at how sustainable the companies in their portfolio are, and where possible, support them in their transition.

As a result, those questions are moving down the chain, also to SMEs.

Even without a direct reporting obligation, there is a strong chance that an SME will be confronted with ESG sooner or later. Through customers. Through banks. Through partners.

That is why ESG is no longer just a regulatory story. It is gradually becoming a new way for companies to work together.

ESG also helps companies better understand their own business

That visibility is not only important because others are asking for it. ESG also helps SMEs gain a better internal understanding of where they stand as a business.

✅ What is already going well today?
⚠️ Where are the possible risks?
⬆️ Where are the opportunities to improve step by step?

These kinds of insights are valuable. They help make a business more resilient, support better-informed decisions, and encourage a more future-oriented way of operating.

Especially in a world where energy prices fluctuate, supply chains are under pressure, climate impact is becoming increasingly visible, and customers, partners and investors expect greater transparency.

In the end, that is what sustainability means: if a way of working is not viable in the long run, it makes sense to approach it differently. Better today than tomorrow.

How can an SME get started with ESG?

For many SMEs, the biggest hurdle is not willingness, but simply knowing where to begin.

Fortunately, there is now more attention for that as well, including through the VSME standard: the European standard for voluntary sustainability reporting for SMEs.

That standard offers a practical starting point to structure relevant sustainability information, without immediately turning it into a heavy administrative exercise. So no unnecessary complexity, but rather a way to gain visibility into what is truly relevant for the business.

That is also what Kube is all about: helping SMEs collect and share sustainability information in a structured way, without aiming for perfection from day one. What matters most is taking that first step.

ESG is no longer a topic that only concerns large companies. It is becoming increasingly relevant for SMEs as well – not only because the market is asking for it more often, but also because it offers valuable insights into a company’s own operations and future.