Sustainability: meaning and importance for smes

The sustainability concept was officially born in the report "Our Common Future", published in 1987 by the World Commission on the Environment and Development of the United Nations’ Environment Programme. It was initially applied only to the environmental field, but over time it was extended to the economic and social fields, until it acquired its current multidimensional meaning. Environment, economy and society are today the three components of sustainable development, intended as "a development capable of ensuring the satisfaction of the needs of the present generation without compromising the possibility of future generations to realize their own". Finally, the UN Agenda 2030 materialized the concept into 17 clear and measurable objectives - and 169 sub-objectives - to be achieved by 2030.

In 2014, the European NFRD - Non Financial Reporting Directive obliged all large listed companies, with at least 500 employees on average, to report their environmental, economic and social performance. In 2022, the new CSRD - Corporate Sustainability Reporting Directive introduced common European reporting standards and expanded the pool of entities subject to the obligation, including listed SMEs. Unlisted SMEs can opt for reporting on a voluntary basis.

When it comes to SMEs and sustainability, the picture is rather alarming: a Capterra survey, conducted in Italy in January 2023, found that 15% of SMEs have never heard of sustainability criteria before and that 73% do not adopt them in their strategies, due to lack of information or specialized personnel. In the few virtuous cases, the environmental dimension always dominates, while social impact and governance are less involved.

In an era of rapid changes and strong objectives set by Europe (for example, the PNRR) it is increasingly important for SMEs to start talking about sustainability and to adapt to international reporting standards. It is not only useful to raise corporate reputation, but also to improve performance, innovate, attract talent and capital, increase cohesion and create shared value.

Investing in sustainability brings benefits in many areas: first, it positively affects a firm’s image and legitimacy attributed by customers and the local community; second, it helps evaluating the organizational processes, the quality of the relationships with the stakeholders, the tangible and intangible of the company; third, it facilitates the attraction of young talents, more and more concerned with sustainability issues; forth it simplifies access to credit by banks, investors and the public sector; fifth it increases the cohesion and co-responsibility of the corporate community around common and shared objectives. Finally, the creation of a Sustainability Report represents for SMEs an investment not only in the future of the environment and society, but also in the future of the company and people who make it up.