Sustainability Strategy for SMEs: Measurable ESG
Large customers, tenders, and banks request data on CO2, working environment, and suppliers. Here's a practical approach to a sustainability strategy with two to four focus areas, baseline, and KPIs that can be followed up quarterly.
Published · 7 min read
In short
- Let the actual demands of customers and tenders set the pace.
- Choose a maximum of two to four focus areas—the rest are merely documented.
- Baseline from data you already have: electricity, fuel, waste, workplace accidents.
- ESG goals are in the same portfolio and follow-up as the rest of the strategy.
What is a sustainability strategy?
A sustainability strategy describes how the company manages its environmental, social, and governance (ESG) factors as an integral part of the business—not as a side project. It includes a few prioritized focus areas, concrete goals with numbers and deadlines, and an owner per goal, just like the rest of the strategy.
For Danish SMEs, the driving force is rarely just idealism. Large customers and public tenders demand data on CO2, working environment, and supplier relations; banks inquire about climate risk; and employees choose workplaces based on this. Therefore, sustainability has practically become an entry requirement for certain customer segments.
The most important choice is to keep the number low. Two to four focus areas with measurable KPIs outperform twelve well-intentioned aspirations, because only what is measurable gets followed up on in a strategy review.
Four areas most SMEs should start with
Choose based on what customers ask for and what you can measure with data you already have.
Energy and CO2 in own operations
Electricity consumption, heating, fuel for own vehicles and machinery. This is where data is available, and where savings are often directly economic.
Examples: kWh per produced unit, fuel per service visit, CO2 emissions from own operations.
Materials and waste
Waste in production, packaging, recycling, and material selection in product development.
Examples: Waste percentage, share of recycled packaging, waste per revenue DKK.
Supply chain
Demands from large customers end up with your suppliers. Start with the 10 most important ones and a simple code of conduct.
Examples: Share of purchasing volume covered by a code of conduct or documentation.
Working environment and employees
Safety, absenteeism, retention, and training. Often the ESG area with the most direct business impact in an SME.
Examples: Workplace accidents with absence, absenteeism in percent, employee turnover.
How to create the strategy in six steps
Expect four to eight weeks alongside normal operations.
1. Map external requirements
Ask your five largest customers and your bank what they actually request, and check tender documents you bid on. The requirements, not the ambitions, set the pace.
2. Conduct a simple materiality assessment
Position 10-12 issues by their importance to the business and their importance to customers and the outside world. The top two to four become focus areas—the rest are merely documented.
3. Establish a baseline using existing data
Electricity bills, fuel cards, waste invoices, accident statistics. Without a baseline, no one can see progress, and without data, no goal can be credibly revised.
4. Set two to four goals with numbers, owner, and deadline
Example: “Electricity consumption per produced unit from 4.1 to 3.3 kWh by the end of 2027. Owner: production manager.” Formulate them as SMART goals.
5. Translate into projects in the portfolio
Each goal requires concrete projects with milestones and budget—LED conversion, route planning, new packaging. These are in the same portfolio as commercial projects.
6. Report with the same cadence as the rest of the strategy
ESG KPIs are monitored quarterly in management reporting. Once a year, status is compiled for customers, the bank, and the board.
From intention to measurable goals
The difference is baseline, numbers, deadline, and owner—not the level of ambition.
| Area | Vague intention | Measurable goal |
|---|---|---|
| Energy | “We want to reduce our climate footprint.” | Electricity consumption per produced unit from 4.1 to 3.3 kWh by Q4 2027. Owner: production manager. Measured monthly. |
| Transport | “Greener driving.” | Fuel per service visit reduced by 15% through route planning within 12 months. Owner: service manager. |
| Suppliers | “Responsible purchasing policy.” | 80% of purchasing volume covered by a code of conduct by December 31st. Owner: purchasing manager. |
| Working environment | “Better safety.” | Accidents with absence from 6 to a maximum of 2 per year by 2028. Owner: operations manager. Status monthly. |
What the requirements mean in practice
Most SMEs are not subject to reporting requirements themselves but face demands through their customers.
Demands from large customers
Listed and large companies must account for their value chain and therefore request data from suppliers. If you cannot respond, you will be removed from the supplier list.
Examples: CO2 questionnaires, codes of conduct, documentation for working environment.
Public tenders
Environmental and social criteria weigh in the award process. Documentation must be available at the time of bidding—not later.
Examples: Points for CO2 data, apprentices, and labor clauses.
Banking and financing
Credit assessments incorporate climate and transition risk, especially for energy-intensive businesses.
Examples: Questions about energy consumption, dependence on fossil inputs.
Employees and recruitment
Credible efforts make a measurable difference in retention—empty statements do the opposite.
Examples: Employee turnover, applications per job posting.
Common mistakes
- Twelve focus areas, no owners—the strategy becomes a statement of intent.
- Goals without a baseline, so progress cannot be documented for customers.
- Communication before results: statements without data become a credibility risk.
- Sustainability is kept outside the normal portfolio and follow-up, and therefore quietly dies.
- Data is collected manually once a year instead of continuously from existing sources.
- The supply chain is ignored, even though that's where the demands of large customers actually land.
Frequently asked questions
What is a sustainability strategy?
+
It is the part of the company's strategy that defines a few prioritized ESG focus areas with concrete goals, numbers, owners, and deadlines—typically within energy and CO2, materials and waste, supply chain, and working environment.
Where should an SME start?
+
Start by asking your largest customers and your bank what they actually require, and establish a baseline using data you already have: electricity bills, fuel cards, waste invoices, and accident statistics. Then choose two to four focus areas.
Does my company need to report on sustainability?
+
Most SMEs are not themselves subject to reporting requirements but encounter demands through large customers, public tenders, and financing, which request data from their suppliers. Specifically check your customer contracts and tender documents for what is required of you.
Which KPIs are typically used?
+
kWh or CO2 per produced unit, fuel per service visit, waste percentage, share of recycled packaging, share of purchasing volume covered by a code of conduct, as well as workplace accidents with absence and absenteeism.
How do we avoid greenwashing?
+
Measure before marketing. Only publish figures with a documented baseline and a source, use the same accounting method year after year, and also state where you did not meet the goal. Communication without data is the biggest risk.
Related guides
These guides are closely connected to sustainability strategy and are natural next steps in your strategy work.
- SMART goals you can follow up onGoals with baseline, owner, KPI and deadline.
- What is a KPI? Guide with examplesGood KPIs, baselines, target levels and data sources.
- Business risk analysisRisk categories, risk matrix and a template with owner and deadline.
- Strategy plan: template and contentWhat a usable strategy plan contains — and what to leave out.
More strategy guides
Analysis and environment
Goals, KPIs and performance
Strategy process and planning
ESG goals with owner, numbers, and deadline
Create a free account and keep sustainability goals, projects, and KPIs in the same follow-up as the rest of the strategy.