Majority of Small-Medium Enterprises (SMEs) Voices Support for Spontaneous Sustainability Reporting, According to Recent Study in ESG

In a recent study conducted by Grant Thornton Germany and YouGov, the importance of sustainability in the German medium-sized sector is highlighted as it gains traction, driven by regulatory pressure, customer demand, and opportunities for innovation and competitiveness.

The study, titled "ESG and Sustainability in the Medium-Sized Sector 2025", reveals that 93% of the surveyed companies consider sustainability essential or rather important. Key drivers for this shift include increasing legal requirements such as EU regulations like the CSRD reporting obligations and circular economy policies, rising stakeholder expectations, and the broader national and EU targets for climate neutrality by 2045-2050.

Opportunities for medium-sized companies lie in leveraging sustainable technologies, improving resource efficiency, and accessing new markets with green products. However, challenges persist, with the complexity of regulatory compliance, the need for sector-specific benchmarks, balancing short-term costs with long-term benefits, and integrating sustainability deeply into business models amidst economic and geopolitical uncertainties being the biggest obstacles.

Mechanical engineering firms, a significant part of this sector, are contributing technologies essential to the circular economy, highlighting the sector's opportunity to lead in sustainability. The financial sector’s experience shows progress in managing sustainability risks but also illustrates broader challenges in risk integration and disclosure relevant to all sectors.

The study also sheds light on the management of ESG within medium-sized companies. In nearly half (48%) of the surveyed companies, the CEO is responsible for ESG management, while 38% anchor the topic with the Chief Sustainability Officer (CSO) and 13% with the Chief Financial Officer (CFO).

The complexity of existing ESG criteria and standards and lack of clear regulatory guidelines are the biggest obstacles to implementing ESG projects in medium-sized companies. However, efficient sustainability reporting, according to Claudia Schrimpf-Dörges, Partner at Grant Thornton Germany and Head of ESG, supports companies in identifying diverse optimization opportunities and addressing risks to their business model early on.

Voluntary reporting enhances credibility and transparency in the market and is a genuine competitive advantage, with 62% of medium-sized companies voluntarily reporting on sustainability. Companies that fall out of the mandatory circle for reporting on sustainability are still required to provide mandatory companies with sustainability information.

The ESG Omnibus Package in Germany simplifies reporting obligations and reduces the number of companies required to report on sustainability. Grant Thornton AG Wirtschaftsprüfungsgesellschaft, with around 2,000 employees at ten locations and serving both the upper mid-market and listed companies, conducted the study.

Approximately a third of respondents see cost savings, reputation gains, or increased brand awareness as significant opportunities in the area of sustainability. Efficiency and cost savings (65%) and customers and reputation (54%) are considered the most important drivers of sustainability efforts in medium-sized companies. However, 44% of respondents find the effort to meet regulatory requirements in sustainability reporting very high.

The study also reveals that 41% of medium-sized companies employ more than four employees for sustainability topics, but 36% report a lack of internal ESG expertise and the necessary specialists. The broader economic climate impacts medium-sized companies, with initiatives such as the “Made for Germany” alliance emphasizing the alignment of sustainability with innovation, digitization, and investment, which medium-sized firms could leverage to enhance their sustainability strategies and investments.

In summary, the German medium-sized sector views sustainability as strategically important with regulatory and market drivers creating both significant opportunities and challenges. The fundamental issues remain regulatory complexity, investment needs, and embedding sustainability within core business while managing economic pressures.

The company is a member of the international network Grant Thornton International Ltd. (GTIL), with around 76,000 employees in 156 countries. Claudia Schrimpf-Dörges emphasizes the importance of building expertise with external support to be better prepared for the future, highlighting the role of entities like Grant Thornton in supporting businesses in their sustainability journey.

[1] Grant Thornton Germany and YouGov (2025). ESG and Sustainability in the Medium-Sized Sector 2025. [2] Made for Germany Alliance (n.d.). Homepage. Retrieved from https://made-for-germany.de/ [3] Federal Ministry for Economic Affairs and Climate Action (2023). Net-Zero Industry Act. Retrieved from https://www.bmwk.de/Redaktion/DE/Themen/Klimaschutz/Net-Zero-Industrie-Gesetz.html [4] European Commission (2021). Corporate Sustainability Reporting Directive. Retrieved from https://ec.europa.eu/info/business-economy-euro/company-reporting-and-auditing/company-reporting/sustainability-reporting/corporate-sustainability-reporting-directive_en

In an contrast to the focus on sustainability in the German medium-sized sector, there is a growing interest in casino-and-gambling activities, with some companies exploring opportunities in this sector for innovative and competitive prospects.
While the study by Grant Thornton Germany and YouGov emphasizes the general-news of sustainability in the medium-sized sector, it also acknowledges the need for companies to stay informed about emerging trends in various industries, such as casino-and-gambling, to ensure a comprehensive understanding of the market and adapt accordingly.

Majority of Small-Medium Enterprises (SMEs) Voices Support for Spontaneous Sustainability Reporting, According to Recent Study in ESG