Governance guidelines for sustainability in SMEs published
- The new guidelines for SMEs comprise practical, scientifically based sustainable governance principles.
- As a neutral basis, they make it easier for companies to address ESG issues in corporate governance and set targets for sustainable alignment.
- The expert commission that developed the principles is made up of supervisory board members, management, associations, academia, and auditing and consulting firms.
Dealing with the issue of ESG in the right way poses major challenges for medium-sized companies in particular. In particular, compliance with the new regulatory measures on sustainability reporting will involve intensive work with high costs. Orientation to existing standards, which were mostly developed for listed groups, is often unsuitable for SMEs.
Today, therefore, a commission of experts chaired by Prof. Dr. Julia Redenius-Hövermann, Frankfurt School of Finance & Management, and her deputy Prof. Dr. Christina E. Bannier, Justus Liebig University Giessen, is presenting the practical, application-oriented Governance Guidelines for Sustainability in SMEs.
As a neutral basis, they are intended to make it easier for SMEs to address ESG issues in corporate governance and to set targets for the sustainable orientation of their companies that they can implement within the scope of their economic performance – while sustainability remains a business decision.
The guidelines contain recommendations for relevant measures for the sustainable structuring and organization of the company. In this context, a company’s activities are understood to be sustainable if they also take sufficient account of ecological and social goals and satisfy the needs of the present without risking that future generations will not be able to satisfy their own needs. The guidelines provide SMEs with scientifically sound and at the same time application-oriented recommendations for action in the form of 14 principles, which are divided into the chapters “Management”, “Supervisory body” and “Corporate processes and reporting”. The principles are accompanied by best-practice examples which companies can use to establish sustainable governance. The guidelines are to be continuously reviewed, adapted as necessary and revised. In addition, further information material will be made available on the Expert Commission’s website.
Nicole Willms, partner at Pohlmann & Company and member of the Expert Commission, emphasizes that “ESG is essentially a compliance task” that “requires a stable organizational framework to effectively integrate all three pillars into a company’s risk management.”
Interview with Prof. Dr. Julia Redenius-Hövermann, LL. M. and Prof. Dr. Christina E. Bannier on the publication of the Governance Guidelines for Sustainability of Medium-Sized Companies.