Impact of ESG on Small Business

In this blog we will go over what is the true impact of ESG practices on small business especially considering that they are not usually mandated under any legislative directive. Despite this, understanding the significance of implementing environmental, social and governance standards is key for small Businesses to thrive in an emerging market where the tenets of good practice in human rights and environmental due diligence is fast becoming paramount.  

“The impact of ESG on Small Business came through the practice of corporate due diligence in their supply chain.” 
Dr Stephen Morse  

This concept is about large companies and their increased need to investigate human rights and environmental risks in their supply chains.  

For instance, calculating Scope 3 emissions forces large companies to consider the environmental impact of their suppliers. As such, they will be making changes and looking for new suppliers, creating opportunities to step in.  

So, the opportunity for small businesses is about perceiving where can you come in and make a meaningful contribution to the environmental credentials of your corporate client. For example, they can play a role in reducing carbon emissions and improving social conditions for their employees, thus positioning themselves as responsible businesses with a positive impact, attracting more investment.  

By aligning with ESG principles, small businesses can attract partnerships with these corporations seeking to enhance their environmental and social impacts. This, in turn, presents an avenue for growth and improvement. 

The first step towards ESG integration is proactivity. What do consumers seek from your business, and how does it impact your bottom line? Small businesses can not only align with evolving societal expectations but also enhance their competitiveness and long-term sustainability.  


Remember that when we talk about these three impact areas, we talk about three “big buckets”: the Environmental aspect encompasses calculations of carbon emissions, energy sourcing, resource management, waste management and recycling efforts.  

The Social dimension is about people. It involves actions to combat human trafficking, enhance labour practices, and promote human rights, diversity, and inclusion.  

The Governance focuses on monitoring and reporting frameworks concerning representations, financial risks due diligence, anti-money laundry and cybersecurity measures. 

Questioning about what do the consumers want from you and what are your commercial impacts can guide you in prioritising your actions around ESG standards. With the increasing number of directives, guidelines, and legislative actions, navigating the ESG landscape becomes crucial for small businesses and can open new doors. 

If you want to learn more about ESG and opportunities, you can access our Industry Insights paper clicking here

Share this post

subscribe to access the file