Sustainability Reporting for SMEs: A Practical Guide to Get Started

Sustainability Reporting for SMEs: A Practical Guide to Get Started

"Small steps towards sustainability reporting by SMEs can lead to giant leaps for a greener, more responsible future."


On a global scale, defining SMEs can be challenging due to the diversity of economic structures, regulations, and business practices across countries and regions. However, there are some common characteristics that are often used to categorize SMEs internationally

  1. Number of Employees:  Few employees to a few hundred.

  2. Annual Turnover or Revenue: Moderate revenue compared to large corporations.

  3. Total Assets: Smaller scale of operation and investment.

  4. Independence: Independent businesses, not subsidiaries of larger corporations.

  5. Contribution to the Economy: SMEs are recognized for their significant contributions to the economy, job creation, and fostering innovation and entrepreneurship.

As of 2023, the definition of SMEs in India is as follows:

  1. Micro Enterprises: Investment in plant and machinery or equipment does not exceed ₹1 crore, Annual Turnover not more than Rs. 5 crore

  2. Small Enterprises: Investment in plant and machinery or equipment is not more than ₹10 crore, Annual Turnover not exceed ₹50 crore 

  3. Medium Enterprises: Investment in plant and machinery or equipment is not more than ₹50 crore, Annual Turnover not exceed ₹250 crore

Why is sustainability reporting crucial for SMEs

Sustainable practices have become increasingly important in today’s business landscape due to environmental, social, and economic challenges. SMEs play a crucial role in the economy and are often considered the backbone of economic development. small business collectively contribute significantly to the Gross Domestic Product (GDP) of many countries. Their diverse range of products and services, innovation, and job creation bolster economic growth and stability, and also tend to be dispersed throughout various regions, even in remote areas.

Despite their size, the collective impact of SMEs on environmental and social aspects is substantial. Tracking ESG factors becomes essential to ensure responsible practices, resource conservation, and social welfare.

Many SMEs are part of larger supply chains, providing goods and services to larger corporations. Tracking ESG factors ensures sustainable practices throughout the supply chain, promoting responsible business conduct.

Given their significant economic and social contributions, tracking ESG factors among SMEs becomes crucial in creating a sustainable and inclusive business environment that benefits society, the economy, and the environment as a whole.


Why SMEs should prioritize sustainability reporting.

SMEs (Small and Medium-sized Enterprises) can’t afford to ignore sustainability reporting for several compelling reasons.

  1. Stakeholder Expectations: Customers, investors, employees, and other stakeholders are increasingly demanding transparency and accountability from businesses regarding their environmental and social impacts. Sustainability reporting allows SMEs to demonstrate their commitment to responsible practices and gain trust and loyalty from stakeholders.

  2. Competitive Advantage: Embracing sustainability can provide a competitive edge in the market. Many consumers prefer to support businesses that demonstrate ethical and sustainable practices, leading to increased customer loyalty and brand reputation.

  3. Risk Management: Integrating sustainability into business operations helps identify and mitigate potential risks, such as regulatory compliance issues, supply chain disruptions, and reputational damage related to environmental or social controversies.

  4. Cost Savings: Implementing sustainable practices often leads to cost efficiencies through reduced resource consumption, waste generation, and energy usage. SMEs can save money in the long run by adopting more sustainable business models.

  5. Access to Capital: Some investors and lenders are becoming more inclined to fund businesses that have clear sustainability strategies and performance metrics. By providing sustainability reports, SMEs can attract potential investors and access a broader range of financing options.

  6. Compliance Requirements: In some jurisdictions, there are legal requirements or industry standards mandating businesses to disclose their sustainability practices. Complying with these regulations is essential for avoiding penalties and maintaining a good business standing.

Here are some steps to get started with sustainability reporting

Sustainability reporting is not just about showcasing achievements but also about acknowledging challenges and showing a commitment to continuous improvement. By embracing sustainability and transparently reporting on your efforts, SMEs can position themselves for long-term success while making a positive impact on the world.

Here is how:

  1. Set Clear Goals: Identify the key areas where your business can make a positive impact, such as reducing carbon emissions, minimizing waste, or promoting diversity and inclusion. Set specific, measurable, achievable, relevant, and time-bound (SMART) goals for each area.

  2. Assess Current Performance: Conduct a sustainability assessment to understand your current environmental and social impacts. This baseline data will help track progress and identify areas that need improvement.

  3. Engage Stakeholders: Involve employees, customers, suppliers, and other stakeholders in the sustainability journey. Their input and support are crucial for successful implementation.

  4. Develop a Sustainability Strategy: Create a comprehensive strategy outlining how your business will achieve its sustainability goals. This may include adopting eco-friendly technologies, implementing social initiatives, and promoting responsible sourcing.

  5. Collect Data: Establish a system for collecting relevant data to measure your sustainability performance. This might involve tracking energy usage, waste generation, water consumption, diversity metrics, etc.

  6. Use Established Reporting Frameworks: Utilize recognized sustainability reporting frameworks such as the Global Reporting Initiative (GRI) & Sustainability Development Goals (SDG) or the Sustainability Accounting Standards Board (SASB) to structure your sustainability report effectively.

  7. Publish the Report: Once the data is collected and analysed, publish a sustainability report that outlines your objectives, progress, and future plans. Make the report accessible to stakeholders through your website or other communication channels.

  8. Improve Over Time: Continuously review and improve your sustainability practices based on the results of your reporting. Engage in an ongoing cycle of assessment, improvement, and reporting.

How Rampart AI empowers sustainability success.


Embracing Environmental, Social, and Governance (ESG) reporting is no longer an option; it’s a necessity for businesses to thrive in today’s sustainable-focused landscape. 

Small and Medium-sized Enterprises (SMEs) play a crucial role in sustainability, and adopting ESG reporting can drive positive change while enhancing credibility and attracting stakeholders, the process of getting started with ESG reporting, and how Rampart AI‘s solution can expedite the journey towards sustainable success.

Solutions typically focus on helping organizations measure, track, and report on their environmental, social, and governance performance.

  1. Data Collection : ESG solutions can aggregate data from multiple sources, such as financial records, environmental impact assessments, social performance indicators, and corporate governance practices.

  2. ESG Performance Tracking: These solutions can assist businesses in monitoring their ESG performance over time, helping them identify strengths, weaknesses, and areas for improvement.

  3. Reporting and Compliance: ESG sustainability solutions often provide tools to generate comprehensive sustainability reports aligned with industry standards and regulatory requirements.

  4. Benchmarking and Comparisons: Businesses can use ESG solutions to compare their ESG performance against industry peers, sector averages, or established best practices.

  5. Risk Assessment: ESG solutions may help identify ESG-related risks and opportunities, allowing businesses to make informed decisions to mitigate risks and capitalize on positive trends.

  6. Stakeholder Engagement: ESG sustainability solutions can aid in engaging stakeholders by providing transparent and credible ESG performance data.

  7. Sustainability Strategy: Businesses can leverage ESG data to develop and refine their sustainability strategies, setting meaningful goals and targets.

Emphasize that by embracing ESG reporting and leveraging Rampart AI’s solution, SMEs can achieve sustainable success while making a positive impact on the environment and society. 

Rampart AI encourages SMEs to take the first step toward a brighter, greener future.




ESG Consultant / BD / Author @
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