Sustainability Strategy and Compliance: Large vs Small Companies

The transition to sustainability reporting is often framed through the lens of large corporations, those with hundreds of employees, multiple business units, and complex operations across continents. But the conversation needs to change. ESG is not the exclusive domain of corporate giants with dedicated teams and deep pockets. In fact, small and medium-sized enterprises (SMEs) have unique advantages in navigating this transition, if approached strategically and proportionately.

Big Companies, Big Systems

When large corporations mobilise 60-person teams to handle CSRD compliance and ESG strategy, it’s not because they’re overreacting. Their scale demands it. With sprawling operations across countries, departments and legal frameworks, these companies must treat ESG with the same structural rigor as financial accounting.

Just as financial systems automatically log every invoice and bank transfer for consolidation into annual reports, ESG data is headed in the same direction. Emissions from company fleets, energy usage across sites, gender representation in teams, all these data points must eventually be tracked, recorded and integrated into a single view of the company’s environmental and social footprint.

Financial reporting revolutionised how businesses operate. It created systems, languages and expectations. The same is now happening with ESG.

SMEs: Less Complexity, More Agility

In contrast, smaller companies, where the CEO or CFO still manages accounting with a trusted advisor and a well-organised folder, don’t need a 60-person ESG team. Most already know how many vehicles they operate, how many employees they have or who manages utilities for their office.

The challenge isn’t scale. It’s know-how. What SMEs often lack is the time, expertise, or bandwidth to decode the legal frameworks, calculation methods or disclosure templates.

That’s where the right technology becomes a game-changer. ESG software solutions can drastically reduce the burden by guiding companies through the process: what data to collect, where to find it, then automatically calculate KPIs and store them in a structured, reliable way. Software can become your ESG “source of truth” helping you understand your company better, not just for compliance.

What is the benefit of ESG for a profitable business?

ESG is too often dismissed as an act of charity. In reality, it’s a strategic tool. For SMEs, ESG can unlock new revenue streams:

• Public tenders often reward sustainable bidders.
• Large clients are demanding sustainability commitments from suppliers.
• Talented professionals want to work for companies that align with their values.
• And in many sectors, consumer behaviour is shifting toward ethically aligned businesses.

That’s not to say every company must score 100% across all sustainability indicators. Instead, businesses should focus on materiality: which ESG risks and opportunities are most relevant to your business model? Start there.

How to improve ESG performance without it being too costly?

Not every business can hire a Big Four. But that doesn’t mean you’re on your own.

Many boutique consultancies now specialise in supporting SMEs with proportionate, budget-conscious ESG strategies. Some even collaborate with software providers and bundle both into a single offering.

At FourOneFour, we have both the software and the expertise within our team.

Plus, it is perfectly possible to adapt our approach to your preferred level of involvement. Some clients do most of the work in-house and turn to us only for highly technical advice. Others prefer for us to run the process end-to-end: from data collection, through report drafting, to answering tricky questions like:

• ‍Can I invest in dual-use technologies and still be "sustainable"?; or ‍
• How do I report emissions if we’re based in a coworking space without control over energy bills?

We also help structure disclosures around what you already have, guiding you through the materiality assessment, identifying short- and long-term KPIs, and helping you refine data collection over time.

You don’t need perfect data on day one, what matters is starting and improving as you go.

The Truth About the CSRD and Data Overload

There is a myth that the CSRD requires over 1,000 datapoints from every business. That’s simply not true. The CSRD introduced a materiality assessment, a filter that helps companies determine which data points are actually relevant. For some SMEs, that may be as few as six material topics. And even those will be split into short-term and long-term priorities.

Don’t let scare tactics from big consulting firms or industry lobbies discourage you. ESG can be scaled, simplified and tailored to fit your company’s size, resources and goals.

Conclusion

ESG is no longer just a trend, it’s becoming part of the infrastructure of doing business. Like financial reporting, it will take time to normalise, but the direction is clear. Whether your company is large or small, there is a right-sized way to start.

Don’t wait until regulations force your hand. Use ESG to sharpen your strategy, compete more effectively and stay relevant in a fast-changing market.

At FourOneFour, we help SMEs turn ESG from a headache into a strategic advantage. Whether you need software, advisory or both, we meet you where you are. Reach out to find out what we can do for your business!