The Sustainability Report

The sustainability report is a document that adds to the economic and financial data the information on environmental, social, and governance (ESG) impacts. It makes visible issues such as greenhouse gas emissions, resource consumption, working conditions, community relations, and transparency in management.

For many SMEs, it is not yet mandatory, but the European directive CSRD (Corporate Sustainability Reporting Directive) requires large companies and listed firms to prepare ESG reports following the ESRS (European Sustainability Reporting Standards). SMEs that want to remain competitive in the supply chain or access financing such as green loans therefore have an incentive to voluntarily adopt sustainability reporting tools.

Benefits and limits for small and medium-sized enterprises

The advantages of a sustainability report include: better management of environmental and regulatory risks, cost reduction through operational efficiency, strengthened reputation with customers and investors, and greater preparedness for future regulatory obligations. Moreover, ESG transparency fosters stronger relationships with business partners.

The disadvantages, on the other hand, concern the organizational burden and the costs of data collection, which can weigh on companies with limited resources, as well as the risk of producing superficial reports or falling into greenwashing if the contents do not reflect real sustainability strategies.

How to build a sustainability report

The process begins with a materiality analysis, which can be understood as financial materiality, impact materiality, or, if the company considers it useful, double materiality. After identifying material topics, SMEs can be guided by frameworks such as the GRI Standards, which offer adaptable guidelines even for smaller companies, or the United Nations SDGs, useful for linking business strategy to globally recognized sustainable development goals.

Practical implementation

To make the report operational, the company must: define clear organizational boundaries, collect data on the topics identified as material (for example energy, waste, governance, occupational safety), choose proportionate metrics, and document the methodologies used.

It is advisable to publish the report on the company website or share it with clients and banks, so as to turn it into a strategic tool rather than a simple compliance exercise. A gradual approach is essential: starting with a few key indicators and expanding them over the years helps keep the reporting process itself sustainable.

Climate change and GHG emissions

Climate change is, in most cases, one of the topics that prove material for any business. Even an SME, in fact, generates impacts through the use of energy, transport, services, and raw materials. For this reason, reporting on greenhouse gas (GHG) emissions has become a central element of the sustainability report.

To measure these emissions, reference is made to the GHG Protocol, the most widely used international standard. The main indicators (KPIs) primarily concern the tons of CO₂ equivalent emitted in a year. In some cases, these are related to production or turnover to calculate emission intensity. Another important KPI is the percentage reduction of emissions compared to a base year, which makes it possible to monitor progress over time.

Emissions are divided into three categories:

• Scope 1, which includes direct emissions generated by the company’s activities (such as fuels, boilers, or company vehicles);
• Scope 2, which concerns purchased energy, such as electricity or heat;
• Scope 3, the broadest and often most significant category, which includes all indirect emissions along the value chain, from raw materials to logistics, up to product use and end-of-life.

The calculation of Scope 1 and Scope 2 emissions is relatively simple: for the former, direct fuel consumption (liters of fuel, cubic meters of gas) is considered and converted into emissions using available standard factors; for the latter, electricity or heat consumption data reported in utility bills is used, applying the emission factor related to the national energy mix.

In this way, even an SME can begin to build a clear and transparent picture of its climate impact, set realistic reduction targets, and communicate progress to partners

In conclusion, the sustainability report is not just a transparency tool but a true strategic investment: it helps reduce risks and costs, strengthen the trust of customers and investors, and prepare for a future in which sustainability will be increasingly decisive for competitiveness.

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