Sustainability

From large companies to SMEs, the ESG transition travels at two speeds

Italian companies face the sustainable transition at two speeds, with large companies ahead of SMEs in implementing ESG actions

18 November 2024

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Sustainable transition is a priority, or at least it is in the short to medium term, because its impact on a company's organisation and growth dynamics is as important as are the transformation enabled by digital technologies and the increase in operating and production costs. This is a major challenge that most companies have already started to face but which is not the same for everyone, as it directly reflects company size.

This is clearly stated in a recent report by Wyser (the global brand of Gi Group Holding active in the field of search and selection of managerial and executive profiles), which highlights differences in the type of actions taken and solutions implemented and outlines, in fact, a transition travelling at two different speeds, one for large companies and a second for small and medium-sized enterprises.

Of the 300 Italian decision makers (C-Level managers, executives and entrepreneurs) surveyed, 78 per cent are of the opinion that the transition driven by ESG principles will have a significant impact on their organisation's business model. Companies, as Wyser's experts observe, are going through a revolution and feel the need to introduce new skills and find new organisational models to cope with it.

The gap between large organisations and SMEs is evidenced by two percentages in particular: 89% of the companies with more than fifty employees (which make up the 'large companies' cluster in the report) have already undertaken activities to be more sustainable and are therefore at a more advanced stage of the journey, compared to 68% of the sample of companies with less than fifty employees.

Even looking at the type of actions undertaken, large organisations demonstrate an approach that tends to include more areas of the acronym ESG (Environment, Social, Governance), adding to the projects aimed specifically at environmental sustainability (this is the case for 46% of respondents) a greater sensitivity to the issue of social sustainability (to which 25% of large organisations look, compared to 18% of small and medium-sized ones).

A further size-related discordance factor relates to the models adopted for the distribution of transition-related responsibilities, namely the establishment of a dedicated ESG team and centralised management of these issues: this solution is much more common among large companies (and in 58% of cases specifically) than in SMEs (where the percentage drops to 25%), which prefer a diffuse responsibility model in two cases out of three.

The reasons for the business gap

But what are the reasons for this gap? The report revealed that there are many reasons for this and that the underlying factors are economic-financial. In fact, the study shows that among the main difficulties that companies encounter on the path to sustainability are the costs involved in the transition (61% of the sample affirmed this) and the scarcity of financial resources to cope with it (41%). Smaller companies, which are less structured and less able to count on economies of scale, are those that struggle most to cope with these difficulties, falling furthest behind on the path to sustainable development. It should be read in this sense, moreover, the choice of SMEs to channel their efforts into the 'Environment' sphere, investing, for example, in energy efficiency solutions with the aim of obtaining not only benefits in terms of sustainability but also savings in operating costs.

A second important cause is compliance with ESG criteria, an increasingly important aspect in relations with customers and suppliers. In the case of companies with more than fifty employees, often part of international supply chains, this happens with a significantly higher incidence: two out of three companies are now required to comply with the sustainability criteria imposed by customers and three out of four have defined rules for the selection of suppliers also based on compliance with sustainability, social and governance criteria.

Regardless of the model adopted and at whatever point in the transition they are at, however, companies agree on one crucial aspect of this process: skills. The study delved deeper into this issue, identifying those that have the greatest impact on the path to sustainable development, and 54% of those surveyed indicated in this regard the need for new technical skills, while 36% highlighted the need for new managerial skills. In concrete terms, we are talking about knowledge of technologies to support innovation in production, facilitated finance and energy management solutions, and circular economy models, without forgetting that figures capable of governing change and increasing the ability to anticipate the future will also be needed. Attracting the necessary skills for sustainable development, as Wyser's experts confirm, is the key to governing such a complex and multi-pronged system transition as ESG. And this paradigm applies to any company, regardless of its size.

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