K&H: Those who prepare for ESG in time can gain a competitive advantage

According to K&H, a conscious transition to sustainability is not just a regulatory requirement, but increasingly a guarantee of business success, which determines who can remain competitive in the domestic and international markets in the long term.

There is still time, but we should not sit back, at least it is not really worth it. Although micro, small and medium-sized enterprises will be exempt from ESG data reporting obligations until mid-2027. However, this reprieve does not mean that it is not worth preparing in time. In fact, those companies that voluntarily and proactively start incorporating sustainability aspects into their operations can already enjoy the benefits that the green transition provides.

ESG: from obligation to business opportunity

According to K&H experts, many small and medium-sized enterprises still view ESG as an administrative burden, even though taking sustainability aspects into account can bring tangible benefits in several areas. Transparent operations and an environmentally conscious approach also expand financing options, as banks and investors prefer companies that operate sustainably in the long term. In addition, sustainability is also key in gaining market share: large companies and international partners are increasingly requiring their suppliers to comply with ESG rules, so prepared SMEs can reach new customers and orders. In addition, environmentally friendly operations can also enable these companies to join green economic chains, which are the basis of the economy of the future.

However, ESG is not only a challenge for businesses, but also plays a key role in the financial sector. Banks have a dual role: they must meet sustainability expectations in their own operations, while directly shaping the green transition of the economy as a whole through their lending and investment decisions. It can be expected that the ECB will increasingly tighten its sustainability requirements for banks, so the pressure on banks (and indirectly their customers) to comply may continue to grow.