Why ESG is your new competitive edge

As transparency in business reporting has increased, so has our awareness of environmental, social and governance (ESG) reporting. But ESG reporting isn’t something that just applies for big corporations and large multinationals.

According to recent research from Sage and the International Chamber of Commerce (ICC), 70% of SMEs now say sustainability is central or important to their business, up from 67% in 2024 and 62% in 2023.

But despite rising ambition, only 8% of these SMEs formally report on their sustainability efforts, a move which could lock them out of opportunities for green finance.

Why ESG is no longer a ‘nice to have’ but a real strategic focus.

Winning the supply chain game

High-quality ESG credentials can have a major impact on your client relationships.

Large multinational corporations are now required to review their Scope 3 emissions (emissions from their suppliers). Because of this, corporations are keen to work with businesses that are wholly transparent about their environmental impact and supply chain sources.

Having ESG reporting ready to share makes you an attractive option for big buyers, giving you a distinct business advantage over competitors who aren't tracking their ESG data.

Attracting talent and customer loyalty

Your ESG credentials tell potential employees and customers a lot about your company.

Modern employees, especially Gen Z and Millennials, want to work for companies that wear their environmental and social values on their sleeve. So, being open and honest about your impacts as a business can be a great way to attract talent to the firm. The same applies to customers, who want to engage with companies that have positive ESG results.

ESG isn't just about saving the planet. It’s about a culture of transparency that focuses on emissions, social impacts and turnover, while also attracting talent and customers.

Mitigating risk and revealing added efficiency

Good ESG management is about mitigating the risk to the company while also operating in a more sustainable and socially responsible way.

You might think the focus is purely on your external impacts as a business. But by looking at areas like supply chain efficiency, carbon emissions and energy usage, your small business can often highlight inefficiencies and spot new ways to make savings.

Reducing unnecessary energy waste, or reducing costs in your supply chain, can lower your operational costs and make the whole business more streamlined as a result.

Your ESG reporting on the metrics that matter

When managed well, ESG reporting is about value, not just values. If you haven’t started tracking and analysing your ESG metrics, now’s the time to start.