Sustainability report for SMEs: complete guide in 2026
Everything an SME needs to know to prepare its sustainability report: what to include, how much it costs, whether it’s mandatory and how to leverage it with clients, banks and public administrations.
What is a sustainability report and why does an SME need one?
A sustainability report is a document that gathers, in a structured way, how a company manages its environmental, social and governance (ESG) impacts. For an SME, it is not a bureaucratic exercise but a tool to organise internal information, respond to external requests and demonstrate with data how sustainability is being managed.
In a context where clients, financial institutions and large companies increasingly request ESG information from their suppliers, having a clear, documented report avoids improvised responses and reduces commercial friction. It is also the basis for developing a sustainability action plan with concrete measures.
The key is proportionality: an SME with 15 employees is not expected to present a report like a multinational. What is expected is a coherent document with real data, adapted to the size and activity of the company.
What should a sustainability report for SMEs include?
Content depends on the sector and activity, but a well-designed report for an SME typically covers these areas:
Environmental
Energy consumption, emissions (carbon footprint), waste management, water and material use. Real data from the last financial year.
Social
Employment, working conditions, training, equality, health and safety. Basic workforce information and internal policies.
Governance
Governance structure, ethics, regulatory compliance, risk management and stakeholder engagement.
It is also advisable to include the company’s carbon footprint as a central quantitative indicator and a reference to identified climate risks.
Is it mandatory to produce a sustainability report for an SME?
For the vast majority of SMEs, it is not legally mandatory. In Spain, Law 11/2018 (non-financial information statement) remains the national non-financial reporting framework, while the draft Law on Corporate Sustainability Reporting (Proyecto de Ley de Información Empresarial sobre Sostenibilidad), which transposes the CSRD and was approved by the Council of Ministers in October 2024, is still going through Parliament.
At EU level, the “Omnibus I” Directive (published in the OJEU on 26 February 2026 and in force since 18 March 2026) has narrowed the CSRD scope: it will apply to companies with more than 1,000 employees and more than €450 million net turnover, for financial years starting on or after 1 January 2027 (first reports in 2028). It is estimated that around 80% of the companies previously in scope are excluded. Member States must transpose it by 19 March 2027.
However, it is becoming a market requirement in several scenarios:
- Supply chains: large companies request ESG information from their SME suppliers to comply with their own reporting obligations (sustainability in the supply chain).
- Finance: banks and funds include ESG criteria in credit risk assessment.
- Public procurement: some tender documents value the availability of a sustainability report (sustainability in public procurement).
- Value chain and the voluntary standard: even if the CSRD does not apply to your SME, in-scope companies will keep asking their suppliers for data. Under the “value-chain cap”, companies with 1,000 employees or fewer cannot be required to provide more than the EU Voluntary Standard (VS), the evolution of VSME (cap applicable to financial years from 2027).
How much does it cost to prepare a sustainability report?
| Type of SME | Estimated cost (outsourced) | Includes |
|---|---|---|
| Micro-SME (1-10 employees) | €1,000 – €2,500 | Basic ESG report, key data |
| Medium SME (10-50 employees) | €2,500 – €5,000 | Complete report, indicators, improvement plan |
| Complex SME (multiple sites/sectors) | €4,000 – €8,000+ | ESRS/GRI alignment, materiality, verification |
The investment typically pays off: having a prepared report speeds up response to client questionnaires, reduces time spent on ad hoc requests and improves the company’s image as a reliable supplier.
What data do I need to produce the report?
- Energy: electricity, gas and fuel consumption (12-month bills).
- Emissions: calculated carbon footprint (Scopes 1 and 2 minimum).
- Waste: types, quantities and authorised waste managers.
- Employment: workforce, contracts, turnover, training.
- Equality: gender pay gap, equality plan (if applicable).
- Safety: accidents, sick leave, risk assessments.
- Governance: structure, code of ethics, whistleblowing channel.
- Value chain: main suppliers, selection criteria.
What it is
A structured document that gathers environmental, social and governance information about the company.
For third parties
Allows you to respond clearly to requests from clients, banks and large companies.
As a tool
Organises internal information and helps prioritise improvements and decisions.
1) What a sustainability report is for
The sustainability report explains, in a structured and understandable way, how an SME manages its environmental, social and governance impacts. It is not a marketing document but an organised response to what the market demands today.
2) Value for third parties
More and more clients, financial institutions and large companies request sustainability information from their suppliers. A report allows you to respond to these requests without improvising or repeating explanations.
3) Value as an internal tool
Beyond third parties, the report helps the company organise data, identify improvement areas and have a clear view of its sustainability position, year after year.
4) What is expected from an SME report
- Proportionality to size and activity.
- Clear and understandable information.
- Basic data and evidence.
- Coherence between what is said and what is done.
5) Common mistakes
- Using excessively generic language.
- Including information irrelevant to the activity.
- Confusing the report with a commercial brochure.
Frequently asked questions about sustainability reports for SMEs
What is a sustainability report for an SME?
It is a structured document that gathers environmental, social and governance information about a company, proportional to its size and activity.
Is it mandatory to produce a sustainability report?
For most SMEs it is not legally mandatory, but it is increasingly requested by clients, financial institutions and large companies.
What is a sustainability report for?
It helps respond to third-party requests, organise internal information and clearly demonstrate how the company manages its impacts and risks.
What is the difference between an ESG report and a sustainability report?
In practice they are used interchangeably. Both cover environmental, social and governance information, although the term ESG is used more in financial contexts.
Does a sustainability report need to be verified?
Not always. For SMEs, a well-documented and coherent report is usually sufficient. External verification is only required in certain contexts.
How much does it cost to prepare a sustainability report for an SME?
It depends on complexity. If outsourced, between €1,500 and €5,000 for medium SMEs. Internally, the cost is mainly dedication time (30-80 hours) and possible training or tools.
What data do I need to produce the report?
Environmental data (energy, waste, emissions), social information (employment, training, equality), governance policies and, if applicable, value chain data. The key is to start with real, documentable information.
What format should the sustainability report follow?
There is no single mandatory format for SMEs. It can follow the EU Voluntary Sustainability Reporting Standard (VS), the evolution of EFRAG’s VSME, GRI (simplified) or a structured proprietary format. The important thing is that it is clear, coherent and documented.