DIMECC on-line: ESG Tool promotes companies' sustainable development and risk management

The sustainability impacts of companies are being monitored more closely than ever. The reporting requirements under the EU Corporate Sustainability Reporting Directive (CSRD) already apply to large companies. While SMEs are not yet required to report, they are affected by the sustainability commitments of subcontracting chains.

“In the coming years, SMEs will face an increasing number of sustainability-related inquiries. These will concern, for example, energy use, material origins, and other sustainability factors,” says Lisbet Frey, Sustainability Specialist at DIMECC Ltd, the leading innovation hub for digitalizing industry in Finland.

Another significant change is the introduction of Double Materiality, which expands traditional materiality analysis to include both economic and sustainability perspectives. In addition to financial profitability and stakeholder interests, double materiality also considers a company’s impact on the environment and society. This approach helps companies assess how their operations contribute to climate change while also evaluating how climate change and related risks affect their business.

“Today, sustainable development is also about protecting business. Without adequate preparedness, floods, storms, and other disruptions caused by climate change can threaten operations,” Frey explains.

Join the pilot program this spring

Large companies increasingly need to assess whether their existing subcontractors and suppliers can continue as partners. According to OP’s survey of large companies, 56% have had to replace subcontractors due to sustainability requirements.

A new ESG Tool aims to help SMEs prepare for future demands and expectations.

“With this tool, companies can anticipate sustainability-related inquiries from subcontracting chains and strengthen their position in the value chain, where requirements are becoming stricter,” says Frey.

The new ESG tool enables companies to assess and report their sustainability impacts more accurately. It is currently in the pilot phase, with a particular focus on ICT and service sector companies, though participation is open to other industries as well.

“I hope a diverse group of companies will join the pilot program. The tool is designed to help businesses comply with CSRD requirements in a practical and useful way,” Frey adds.

Designed to meet broad requirements

The ESG Tool has been developed with CSRD requirements in mind and aligns with ESRS standards.

“The tool covers the entire stakeholder landscape, from a company’s internal resources and value chain to external influences such as nature and community perspectives,” Frey explains.

It includes five key modules to help companies identify their stakeholders, analyze risks and impacts, and integrate sustainability principles into their strategies.

For Frey, the first and most crucial step for SMEs is to clearly define responsibility for sustainability-related issues.

“Often, this role falls to the CFO or corporate responsibility specialist, but for SMEs, having clear accountability is essential to meeting sustainability and value chain requirements. When someone takes ownership and systematically monitors the data, consistency and quality are ensured. This not only enables accurate data tracking but also supports the long-term development of sustainability efforts,” she emphasizes.

Collaboration across the Baltics

The development of the ESG Tool is supported by key partners, including the Ministry of Economic Affairs and Employment, the Estonian Ministry of Economic Affairs and Communications, the Estonian Ministry of Finance, the Ministry of the Environment, and other organizations from the Baltic countries and Poland. The initiative is part of the Interreg Baltic Sea Region programme.

The tool will be available to all companies by the end of 2025.

Text: Kaisa Kaukovirta
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