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So for whom is ESG mandatory?

Based on the European Corporate Sustainability Reporting Directive (CSRD), from 2024 onwards, all big companies and listed SMEs will gradually be required to submit annual Sustainability Reports.

More specifically, the Directive applies to EU companies that meet at least two of the following:

· More than 250 employees

· Net turnover of more than € 40 million

· Over €20 million annual total balance sheet.

It also applies to companies that are not based in the EU, but have a net turnover of €150 million and at least one subsidiary in Europe.

Based on the above, one would conclude that smaller companies that do not fall into these cases are left out and are not required to take action in relation to ESG.

However, there is one key phrase that ultimately indirectly extends the mandatory requirement to almost everyone!

"Supply chain due diligence"

With this phrase, ESG Reporting becomes effectively mandatory for the majority of small and medium sized companies, if they are suppliers to large or listed companies and if they will need to raise funds at some point.

If Greek SMEs do not adopt an ESG strategy they will not be able to sell products and services to large companies or secure loans from banks.

In other words, if Greek SMEs do not adopt an ESG strategy and prepare themselves to be able to provide immediate and correct ESG data with measurable KPIs, they will simply not be able to continue selling products and services to larger companies, nor will they be able to receive loans, and banks will not be able to operate under the rules of "sustainable finance". The principle of proportionality applies, of course. The requirements are not the same for a Group in the livestock sector, for example, and for a service company that provides services to it! But in both cases there will be requirements.

Managing the costs of adopting ESG principles is a major challenge for Greek SMEs. Companies that will solve the puzzle of proportionality right from the beginning and do the proper planning and implementation of the whole process are likely to emerge as winners not only in the long run but also in the relatively near future.

At E-ON Integration we have the solution. We provide a wide range of specialized services, and most importantly, we organize and automate the process through E-ON RIBIA ESG software. This way we achieve the best possible TCO for companies and their transition to ESG.


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