Why SMEs need clear structures now - and how to create real management capability
Companies that map their sustainability performance transparently and consistently create trust - among customers, employees, investors and financial institutions. The ability to use ESG data strategically is increasingly becoming a competitive advantage. Regulatory requirements such as the CSRD, the LkSG or international frameworks such as the EUDR only provide the framework - the decisive factor is the added value that companies themselves can derive from their data.
However, medium-sized companies in particular often reach their limits when it comes to implementation. It is not a lack of will - but a lack of time, expertise, processes and digital tools. Many companies face the challenge of implementing complex ESG requirements in a structured and efficient manner - without losing control in the process
ESG data management in SMEs: where things really get stuck
Many stumbling blocks in the ESG area are of a structural, organizational or technical nature - regardless of industry or company size. We encounter the following pain points time and again in practice:
- ESG data is scattered - and no one has an overview
Medium-sized companies rarely have a central ESG team. Environmental indicators are in facility management, supply chain information in purchasing, social standards in the HR department. This leads to:
- No central data source: ESG data is distributed across locations, departments and Excel spreadsheets
- Different formats: electricity consumption in euros or kWh? Supplier evaluations as PDF or in free text?
- Information silos: ESG metrics are not shared because no one knows who needs them in the first place
???? Example: A company wants to analyze the emissions from its five German sites for ESG reporting under the CSRD. However, the consumption data is available in various formats—some in the energy management system, some in the construction log, and some not at all.
What is missing: A central ESG data platform that bundles, standardizes and makes information accessible - regardless of source or format.
- Responsibilities are unclear - tasks are left undone
Who is actually responsible for ESG data? In many companies, this question remains unanswered:
- ESG is treated as a secondary topic - without clear roles or processes
- Deadlines are overlooked because there is no centralized project management
- Queries remain unanswered because no one feels responsible
???? Example: An ESG data request is sent to suppliers—but no one follows up or ensures quality control. Four weeks later, 60% of the responses are still missing.
What is missing: clear responsibilities, transparent processes and a centralized system for distributing tasks.
- ESG data collection is time-consuming - and repetitive
Many ESG processes are manual: requesting data by e-mail, merging it in Excel, copying it into reports. This means:
- Duplication of work for each new ESG reporting (e.g. for customers, CSRD, internal targets)
- Error-prone due to copy-paste, version conflicts or misunderstandings
- No scalability with more locations or new requirements
???? Example: A supplier is surveyed three times within six months on similar topics—each time with slightly different questions and recipients. Frustration grows, and the quality of responses declines.
What is missing: An end-to-end ESG data process - with automated collection, a central database and reusability.
- Data quality is patchy - lack of trust
Even if ESG data is available, uncertainty often remains:
- No automated validation of entries
- No versioning for subsequent changes
- Unclear how ESG metrics were calculated in the first place
???? Example: Data on packaging materials is missing from the Scope 3 footprint. The purchasing department submits estimated values—without any documentation explaining how they were calculated. The CO₂ figure deviates significantly, but this goes unnoticed.
What is missing: transparency, verifiability and documented traceability - for credible, reliable ESG reports.
- Requirements change - structures are missing
CSRD, ESRS, LkSG, EUDR - what fits today will be outdated tomorrow. Many companies can barely keep up:
- No overview of new obligations and deadlines
- No standardization to use ESG data multiple times
- High manual effort for adjustments
???? Example: A company has been preparing for voluntary sustainability reporting—but now the CSRD is coming into play. The ESG data collected so far no longer fits structurally into the new framework.
What is missing: a system that evolves with the requirements - and combines flexibility with standardization.
Why we developed Substain as an ESG tool
Substain is our answer to the structural challenges faced by SMEs in their everyday ESG work. Developed with a practical focus - for everyone who finally wants clear processes, smart interfaces and comprehensible ESG data quality.
Our platform helps companies to record and manage ESG data efficiently, consistently and sustainably. Substain creates clarity instead of chaos:
- Without excessive bureaucracy
- Without a major IT project
- But with a system, transparency and trust
Substain provides the technical and methodological structures to not only collect ESG data, but to use it in a meaningful way - as a basis for statutory reporting obligations, strategic decisions and real change.