About the project

The EU Taxonomy, which is the EU’s classification system for sustainable activities, entered into force in January 2022 and entails clarifications and more specific requirements regarding companies’ documentation of sustainability within the three areas: Environment, Social, and Governance (ESG).

In practice, this means that Danish companies, using uniform reporting standards set by the EU, must disclose both forward-looking and backward-looking qualitative and quantitative information about their efforts within the three ESG areas. The aim of the standardized reporting requirements is to make companies’ sustainability data more accessible, reliable, and comparable. As a result, virtually all listed companies in the EU, including SMEs, are therefore subject to new and extensive sustainability reporting obligations.

Non-listed small and medium-sized enterprises (SMEs) are initially not covered by the requirements, but as suppliers to larger companies they are affected in that they already now have to provide sustainability data to customers that need it for their own reporting.

In particular, CO2 emissions across value chains (scope 3) are of significant interest and focus for companies, as on average they account for 75% or more of companies’ greenhouse gas emissions. Therefore, collaboration on and mapping of CO2 emissions and ESG reporting become a means for SMEs to future-proof their place in the value chain and to secure growth and access to new customers, partners, and markets. 

However, the challenge for SMEs is that they often do not have the data, resources, and/or competencies to map their CO2 emissions or prepare an ESG report, and the costs of having this handled externally are a major investment for an SME.

The purpose of the project is to help Danish SMEs report on ESG across their value chain and to identify new opportunities for future-proofing and developing their business, thereby attracting new customers, partners, and investors.

SMEs do not operate in a vacuum, so their ESG reporting—and especially their ESG-driven business development—depends on the value chain they are part of. Therefore, this project involves both SME suppliers and large companies (the SMEs’ customers). In this way, the project can generate knowledge about how collaboration in the value chain can contribute to mapping CO2 emissions, ESG reporting, and the opportunities for ESG-driven business development.

Methodologically, the project uses accompanying research and case studies throughout the period to uncover what actually works and what does not in ESG efforts—and why. The latter is especially important in the development of ESG best practices as well as SME-specific tools for reporting and business development.

Other projects have aimed to establish a baseline for the sustainable production of the future and to spread awareness of the baseline and the five indicators: Water consumption, Energy consumption, Resource consumption, Waste production, and CO2 emissions.

The scope of the project “ESG – from reporting to business” is to collect and develop knowledge, tools, and training for SMEs and their value chains so they can carry out mapping and business development based on ESG themselves. Through this, new knowledge is gained about how we can succeed, in very concrete terms, in documenting CO2 emissions and reporting on ESG in SMEs and across Danish value chains. In this context, the project aims to understand and develop new knowledge and knowledge tools to help SMEs elevate ESG reporting to ESG-driven business development.

Experiential learning: We work directly with SMEs and value chains to map and understand their ESG challenges and opportunities.

Tool development: Through workshops and dialogue, we create practical ESG knowledge tools tailored to the specific needs of Danish companies.

Embedding and dissemination: We ensure that our results are widely embedded through collaboration with business hubs, tech hubs, and industry organizations.

Open access: Our tools, webinars, and best practices are available to all Danish SMEs, tailored to promote sustainable growth.

In the short term

• Danish SMEs and their value chains, using the project’s models and guidelines, can prepare ESG reporting themselves.
• Based on their ESG reporting and the project’s tools, SMEs can develop their own ESG-driven business development.
• Value-chain collaborations become more effective through the project’s tools.
• The project’s 10,000 validated CO2 emissions codes help improve the quality and specificity of Danish SMEs’ and value chains’ CO2 documentation and ESG reporting.
• The project’s knowledge, emissions codes, and best practices support the overall CO2 reduction of Danish SMEs and value chains.

In the long term

• SMEs’ work with reporting and ESG-driven business development provides access to new customers and markets.
• Based on their ESG reporting, SMEs achieve a better sustainability rating and can attract more investors and partners.
• That through their strategic work with ESG, SMEs become more attractive to green talent and new employees.
• That SMEs future-proof their business through ESG and the development of sustainable competitive advantages.
• That SMEs strengthen their brand value through ESG reporting.
• That through their ESG work, SMEs gain increased access to green funds and green investments.