Achieve compliance withSFDR

The Sustainable Finance Disclosure Regulation (SFDR), which came into effect in March 2021, is a cornerstone of the EU’s efforts to increase transparency in the financial sector and combat greenwashing. Aimed primarily at financial advisors and market participants such as asset managers, banks, insurers, and pension funds, the SFDR introduces standardized disclosure obligations for ESG (Environmental, Social, and Governance) criteria.

The regulation requires reporting at both the company and product levels, categorizing financial products into three groups based on their sustainability characteristics. Additionally, financial institutions must annually disclose the main adverse environmental and social impacts.

Although small and medium-sized enterprises (SMEs) are not directly obligated to comply with SFDR requirements, their operations are increasingly influenced by it. Larger companies and financial institutions that must meet SFDR reporting standards are putting pressure on SMEs to provide detailed ESG data across the supply chain. Furthermore, SMEs seeking financing or partnerships may face additional scrutiny from banks or investment firms that need to disclose the environmental performance of their portfolios.

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Tackling SFDR challenges: A Guide for SMEs

Increased Data Demands

SMEs are being asked to supply detailed sustainability information, such as carbon emissions, energy use, and adherence to social and governance standards. This can be a significant burden for businesses without robust data collection systems or dedicated ESG expertise. SMEs that embrace these changes can position themselves as key players in the green transition while contributing to a more sustainable economy.

Limited Resources

SMEs often lack the financial, human, or technical resources to implement and maintain the systems required for ongoing ESG compliance. Building these capabilities can be time-intensive and costly, especially for smaller firms already operating on tight budgets. With automated digital solutions, SMEs gain access to valuable ESG data insights.

Competitive Pressure and Risk of Exclusion

In an environment where ESG performance is increasingly scrutinized, SMEs that fail to meet expectations risk losing access to funding, partnerships, and market opportunities. This can create a competitive disadvantage in sectors where sustainability is a key factor.

Manage the Risks in YourSupply Chains

Achieve full transparency and control over your supply chains with supplycanvas. Empower your business to trace materials back to their origin and ensure compliance with sustainability and risk standards. Collaborate seamlessly with suppliers to map and monitor your supply chain. Identify potential risks and implement targeted solutions with ease, thanks to actionable insights and recommendations tailored to your needs. Simplify compliance, enhance sustainability, and confidently manage risks with supplycanvas.