There are still many SMEs that say this out loud or at least think it: “ESG does not apply to us.” But it does. Because the entire market is in motion and undergoing rapid change. And if your company continues to do business as usual without responding to the changes knocking at the door, you will be overtaken – whether you like ESG or not.
Get control of your business
At its core, ESG is about having control of your business. It is a structured way of analysing your risks not only financial risks, but also how your business impacts the climate, society, and your employees. It is about how vulnerable you are to changes in the market. Whether you have control of your supply chain. Whether you are prepared to document this both for your own sake and for everyone who is beginning to ask questions.
This morning, I was driving behind a van advertising diamond drilling in concrete. And I couldn’t help thinking with my engineering and ESG lens on whether that company has even considered where its industry is heading. Concrete is one of the largest CO₂ emitters in the construction sector. At the same time, key components such as sand are already becoming scarce globally. It is only a matter of time before taxes, regulation, or pressure from developers, NGOs, or business partners demand alternatives. And that is where the question arises: has that company even assessed whether its business model will still hold in five or ten years if it continues to offer diamond drilling in concrete?
Changing direction takes time especially if your core business is based on a single method or product that may not create the same value in five years. If you wait until the last moment, you risk not only losing customers, but also losing relevance in a rapidly changing world.
ESG is about survival
Unfortunately, many SMEs believe that ESG is just about writing a report for the sake of reporting – or about to demonstrate that they are green and sustainable. That is a fundamental misunderstanding, and this topic is flooded with misinformation. ESG is not about telling the world how sustainable you are. It is about ensuring that your company can still access financing, attract the right business partners, and sell its products and services in the future.
This is also where you will find the answers when your bank asks for documentation of your risks, or when a customer suddenly demands insight into your CO₂ emissions- without warning.
You cannot wait until someone calls and asks
And no, your customers may not be asking for it right now. But they will. Because the companies you work with are already in motion and many of them are already required to collect data from their subcontractors. That requirement will land on your desk sooner or later.
Then there is regulation. Many SMEs believe that the CSRD directive has been cancelled. It has not been postponed. In the meantime, many of your customers and partners are already subject to requirements from their own customers and partners and they need you to deliver documentation. If you cannot, they will most likely find someone who can.
In addition, legislative proposal L193 is expected to enter into force on 1 July 2025. This means that banks and financial institutions will be required to ask about your ESG risks regardless of company type. This is no longer about whether you want to. It is about being able to answer – and document it.
ESG and sustainability are not the same – but they must work together
And what about those who promise you an ESG report in record time – without effort? Stop right there. Because if someone tells you that a ESG-report makes your business sustainable, you are already heading towards greenwashing. An ESG report does not make you sustainable it documents how you work with risk, responsibility, and the future. That is something entirely different.
ESG and sustainability are not the same, but they must work closely together. Much like finance and strategy – on their own they say very little, but together they become powerful. Creating something that delivers value requires depth, time, and honesty and that is where the real difference lies.
According to McKinsey’s 2024 Global Supply Chain Leader Survey, 90% of surveyed companies experienced supply chain disruptions in 2024. Yet only 25% have formal, management-level processes to discuss these risks. This shows how few companies have a structured approach to identifying and managing risks in their value chains and how critical it is to take this seriously.
So no – you do not need to be a first mover. But you do need to start. Because the market is changing, a new generation is entering the workforce, and the combination of resource scarcity, geopolitical instability, the climate crisis, and the biodiversity crisis creates a challenging but opportunity-rich landscape one you must be able to navigate.