22 June 2021 – We have been working with a number of organisations on eSG Lab, an initiative which aims to support the sustainable development of companies of all sizes through the full integration of environmental, social and governance (ESG) issues in decision-making and governance processes.

Created to implement the commitment expressed by 77 business leaders who have joined the "CEOs Call to Action", the Europe-wide scheme has been led by Fondazione Sodalitas in Italy to mobilize companies, their stakeholders, civil society and institutions towards sustainable and inclusive growth.

eSG Lab aims to develop a new strategic organizational model and a tool for sharing knowledge and experiences which companies can use to respond to major environmental and social challenges and benefit from the competitive opportunities that arise, helping to build a sustainable economy.

As part of the project, a research team from SDA Bocconi carried out interviews with a selected sample of CEOs identified by Fondazione Sodalitas member companies, aimed at understanding their strategic vision of sustainability issues and gathering their perspectives on SMEs and their transition to more sustainable models.

The project aims to share the experiences, tools and knowledge of large companies who are most advanced on these issues and share them with the medium and small companies which make up 80% of employers in Italy.

From the interviews it clearly emerged that sustainability affects all aspects of business including key issues, economic sectors, stakeholders, access to markets and operations. There is also an acceleration of ESG awareness amongst the companies interviewed and this is reflected in their approach to risk management. They are aware that not being sustainable can prevent access to essential resources and opportunities.

The interviewees also agreed that sustainable models can provide concrete benefits for SMEs with improved performance such as an increase in revenues and margins, reduction in costs and better risk management. Access to resources and opportunities such as global markets, certified supply chains and more attractive credit terms are also resulting benefits, along with greater employee satisfaction and involvement.

Obstacles of a cultural nature were also highlighted, such as an unwillingness to change and corporate cultures anchored in the past. Operational issues such as a lack of KPIs and tools tailored to SMEs can also pose a challenge, as can a potential lack of internal skills particularly with respect to sustainability issues.

The interviews with business leaders highlighted the steps required to develop a strategic organizational model aimed at supporting the decision-making processes of SMEs from an ESG perspective:

  1. Promote the evolution of corporate culture, developing and disseminating more appropriate models of sustainability governance for SMEs

  2. Promote the measurement and reporting of ESG performance of SMEs through tools, frameworks and clear, straightforward KPIs.

  3. Develop initiatives to raise awareness, information, training, mentorship, partnerships and networking

  4. Promote sustainable demand to maximise the substantial organizational and economic benefits for SMEs

More information on the next steps of eSG Lab is available by clicking here.