ESG: why is everyone only talking about large companies?

By: Trademagazin Date: 2024. 12. 09. 12:23

ESG aspects are key sustainability metrics. Yet, when we talk about ESG compliance, we most often refer to large companies and listed companies. But what about medium-sized companies, which are the driving forces of many national economies? Grant Thornton experts have examined the challenges and opportunities of the medium-sized company segment in detailed international research, highlighting the specific situation of the Hungarian market.

Medium-sized companies play a key role in the operation of national economies, and therefore cannot be left out of sustainability strategies. Whether it is about reducing carbon emissions or the possibilities of green financing, ESG is also important for these companies.

Medium-sized companies: the invisible giants of the economy in the ESG system

The current regulation does not yet apply to the domestic medium-sized company category, but on the one hand, they will come in time, and on the other hand, many have already faced the fact that it becomes difficult to prevail without ESG.

Large companies’ reporting obligations also extend to the supply chain, so they already expect their suppliers to operate according to ESG considerations. Nowadays, when some medium-sized companies work as suppliers to global players, and in the case of many Hungarian medium-sized companies, this position is the business goal itself, dealing with ESG is essential. This difference in approach is also reflected in the Grant Thornton survey: 19% of medium-sized companies in international markets are interested in sustainability due to brand and corporate reputation considerations. 14% deal with ESG due to market competition, and 11% due to more favorable financing.