The legislative trend at the European level is that a growing number of companies must back up their sustainability commitments with data. The new directives that are being approved by the European Union represent a paradigm shift in the way companies should approach sustainability, due to the impact on the entire value chain and the implications in the field of communication. Small businesses, micro-SMEs and freelancers must start preparing themselves on sustainability issues if they want to continue working for large organizations.
The days of using sustainability reports as a showcase for good practices or business eco-posturing (greenwashing) are numbered. It is no longer enough to appear sustainable, now it is also necessary to demonstrate it. It’s time for sustainability and communication leaders to work together to build a strong and responsible sustainability communication strategy together that has a positive impact on the company’s reputation .
The Corporate Sustainability Reporting Directive (CSRD) will oblige around 50,000 European companies (according to figures provided by Grant Thornton) to report on their environmental, social and governance (ESG) impacts across the value chain. In this way, large companies and listed SMEs will not only have to report greenhouse gas (GHG) emissions directly controlled by the organization (Scope 1 and 2), but also those produced as a result of their activity, but generated by the set of companies that make up their supply chain (Scope 3). As the Carbon Disclosure Project (CDP) highlights, Scope 3 GHG emissions are expected to be material for many of the companies included in the scope of this Directive.
In the case of other indicators, the company is not required to include value chain information in all disclosures, but only when such information relates to material impacts, risks and opportunities beyond its own operations, due to its business relationships, and when expressly required by the relevant information requirement. So the company should focus on those suppliers where the impacts, risks and opportunities identified as material are most likely to occur.
Despite the fact that only listed SMEs are within the scope of this European CSRD Directive, the reality is that a good number of small enterprises, micro-SMEs and the self-employed will be indirectly obliged to collect sustainability data and comply with a series of indicators (such as targets for suppliers on the sustainable use of materials, for example, X% recycled content or X% less waste) if they want to continue working for large companies.
This new context in terms of non-financial disclosure poses significant barriers for 94% of the Spanish business fabric, which will have to make a management effort for which it is advisable to prepare in advance. In addition, they must foresee an economic impact when the large clients to whom they provide their services require verification of the information by an independent third party.
The objective of this Directive is to require transparency, improve the management of companies in the field of sustainability and, in addition, help identify greenwashing practices, thus complementing the European Directive on Greenwashing Directive, which aims to protect consumers against unfair commercial practices.
In short, a new stage is opening up in the field of corporate social responsibility communication in which organizations of all sizes will have to be more cautious when launching commitments in terms of sustainability. From Huella Responsable we recommend that small companies, micro-SMEs and the self-employed begin to prepare themselves in this area and identify sustainability as a new business opportunity that can open doors to new customers who are increasingly concerned about the social and environmental impact of their activity.
