How to Win at Sustainability Reporting and Influence People

Smaller businesses have always had a harder time with sustainability reporting than large corporates with dedicated ESG teams — the frameworks, the data collection and the energy policy landscape rarely align neatly with how an SME actually operates. That's true whether or not a company is legally required to report at all, and for most SMEs, as of 2026, they aren't.

The scope has actually shrunk

Since we first wrote this post, the EU's Omnibus I reforms have significantly narrowed who has to report under the Corporate Sustainability Reporting Directive. The Council's final package, in force from 18 March 2026, raises the CSRD threshold to companies with more than 1,000 employees and over €450 million in net turnover — a change estimated to remove roughly 80% of the companies originally brought into scope (Council of the EU, February 2026). For most SMEs, mandatory reporting is no longer the pressure point it looked like it would be two or three years ago.

What hasn't gone away is the commercial pressure. Large customers, banks and investors still ask their smaller suppliers for sustainability data, even when nothing in EU law compels them to provide it — which is exactly why the EU is developing a Voluntary SME standard (VSME), designed to let smaller companies answer those requests in a simplified, proportionate format without being pulled into the full CSRD regime. If you're an SME being asked by a larger customer to "just fill in this ESG questionnaire", the VSME framework is worth knowing about before you build something from scratch.

Practical steps for SMEs advancing their environmental agenda

Here are practical starting points for SMEs looking to get their sustainability reporting in order, or simply to be ready when a customer asks:

1. Measure before you report

You can't credibly report what you haven't measured. Start with Scope 1 (direct emissions from fuel and operations) and Scope 2 (emissions from purchased electricity) — the two scopes every framework, voluntary or mandatory, expects as a baseline. Several carbon-accounting tools and consultancies now build specifically for SME budgets rather than adapting enterprise tools downward.

2. Choose certification proportionate to your size

Full ISO 14001 certification is a serious undertaking for a small team. Lighter-touch, SME-specific environmental management schemes exist across most European markets and are worth investigating before committing to the heavier option.

3. Use what your customers already accept

If a large customer is asking for sustainability data, ask what format or platform they already use across their supplier base — EcoVadis and similar supplier-assessment platforms are widely enough adopted that filling in one profile can often satisfy several customers at once, rather than building a bespoke response for each request.

4. Look for funding and technical support, and check it's still live

Support schemes for SME decarbonisation and green innovation exist at both EU and national level, but they change year to year — eligibility windows close, budgets get reallocated, and named programmes are sometimes folded into successor schemes. Before you build a business case around a specific grant or accelerator, check its current status directly rather than relying on a description that might be a year or two out of date.

5. Get the story straight before you tell it

Even without a mandatory framework to follow, a short, honest sustainability narrative — what you've measured, what you're doing about it, what you haven't solved yet — is worth more to customers and staff than silence, and considerably more than an overclaim that doesn't survive scrutiny.

The questionnaire problem

Talk to almost any SME supplying larger corporates and you'll hear the same complaint: the sustainability questionnaires never look the same twice. One customer wants a CDP-style climate response, another wants a bespoke spreadsheet, a third wants a narrative statement modelled on their own CSRD disclosures even though the supplier itself has no obligation to report under CSRD at all. Answering each one from scratch is exactly the kind of resource drain that gave rise to complaints about reporting burden in the first place — which is precisely the gap the VSME framework and platforms like EcoVadis are trying to close, by giving smaller suppliers one structured answer they can reuse across multiple customer relationships rather than reinventing the response every time.

Our advice to SME clients navigating this is usually the same: build your underlying data collection once, properly, and then treat each individual customer request as a formatting exercise on top of it, rather than starting the whole exercise again from a blank page. The investment in getting the underlying numbers right — verified energy use, real supplier data, an honest Scope 1 and 2 baseline — pays for itself many times over once you're fielding a fourth or fifth request in the same year.

Don't let the narrower scope become an excuse

There's a temptation, now that most SMEs sit outside mandatory CSRD scope, to treat sustainability reporting as something that can wait indefinitely. That's a mistake in two directions. Practically, customer and investor pressure hasn't gone away even where legal pressure has eased — and building the underlying capability now, while there's no statutory deadline forcing a rushed job, tends to produce a far more credible result than scrambling once a major customer makes it a contractual condition. And reputationally, being able to answer a sustainability question confidently, with real data behind it, is itself a competitive advantage against smaller competitors who still have nothing to say.

Are you a small business working out your sustainability strategy? How are you approaching reporting requests from larger customers? Share your experience with us.