The project aims to help small and medium-sized enterprises (SMEs) draw up ESG (Environment, Social and Governance) reports and identify their business development opportunities on the basis of these.

Specifically, based on five large Danish industrial value chains (Siemens, Kamstrup, Grundfos, Terma and Linak) and their 20-25 Danish SME subcontractors, the project's goal is to

1. Prepare ESG reports for these companies
2. Gain insight into the SMEs’ requirements, challenges and opportunities with ESG
3. Assist the companies with ESG business development based on their ESG reports
4. Map best practice within ESG reporting and ESG business development
5. Cement this knowledge in all the companies and project partners
6. Ensure nationwide dissemination and access to the knowledge-tools and guidelines developed and offer further education and training in the field.

Requirements for businesses

The background for the project is that, according to the EU's classification system for sustainable activities, since January 2024 Danish companies have had to publish future and retrospective information about their activities within ESG. One of the reasons for this is to make all sustainability information more accessible and comparable.

ESG reporting is initially only applicable to large organisations. Small and medium-sized enterprises as well as insurance companies and credit institutions are not yet covered by the rules.

SMEs face problems anyway

The problem is that an SME still has to report its sustainability data if it has large customers, because the larger organisation will need the data for its reporting. For this reason, indirectly, a small or medium-sized business also needs to know this data.

Furthermore, investors look for ESG reporting as a basis for their investment and co-operation with a company. This means that it is strategically advantageous for SMEs to prepare ESG reports, even if they are not currently required to do so by the regulations.

The problem for SMEs is that they often do not have data on their carbon footprint or ESG parameters, nor do they have the resources or expertise to prepare ESG reports. They also often do not have the tools to convert the knowledge they gain from preparing ESG reports into ESG-driven business development in the organisation. This is what the project aims to learn about and help companies with.

The project will run from February 2024 to February 2026.

Further information

Professor Annabeth Aagaard
Department of Management
Aarhus BSS
Mail: aaa@mgmt.au.dk