Finland’s SME Sustainability Barometer 2023: Sustainability increasingly important for competitiveness of export and growth companies

The importance of sustainability is already widely recognised in the Finnish SME sector. However, only half of SMEs (companies with 10–250 employees), have set sustainability targets. According to the SME Sustainability Barometer commissioned by the Confederation of Finnish Industries (EK), the larger, more growth-oriented and export-driven a company is, the further along it is in the development of its sustainability work.

The SME Sustainability Barometer examines the views of companies with 10–250 employees, covering 455 responses from SME corporate decision-makers. The previous barometer, which was also conducted by Aula Research, was carried out two years ago.

Almost 90 per cent of the SMEs that participated in the survey feel that sustainability plays an important role in their business operations. The primary motives for advancing sustainability are the organisation’s values and customers’ expectations.

The companies consider their own employees as the most important aspect of sustainability work, covering areas such as personnel wellbeing, occupational safety and competence development. Climate and environmental measures are almost as important.

As a whole, the results have remained unchanged compared to the SME Sustainability Barometer conducted two years ago, according to Elina Sonninen, Corporate Responsibility Specialist at EK:

“However, there has been progress in the setting of sustainability targets. Also, a slightly higher number of respondents now recognise the benefits of corporate responsibility regarding access to financing. The larger, more growth-oriented and export-driven a company is, the further along it is in the development of its sustainability work.”

According to Petri Vuorio, Director of Entrepreneurship and Business Environment at EK, the business impact of sustainability has not yet materialised in the everyday life of SMEs:

“Ongoing regulatory projects will mean, however, that the cost of financing and access to supply chains will increasingly depend on the SME’s sustainability profile. Sustainability can, and should, therefore be used to build competitive advantage, and in the future it may even turn into a prerequisite for the operations of many SMEs. Companies should start preparing for this now.”

Key results in figures:

• 89 per cent of SME sector employers consider sustainability to be a very or fairly important factor from the perspective of their business. This perception was uniform regardless of the company size or the business sector. In practice, everyone felt that sustainability would have an even greater role in the future.
• 79 per cent highlighted personnel wellbeing, occupational safety and competence development as the most important aspects of sustainability. Environmental responsibility was also important (climate change: 43%, biodiversity and other environmental protection: 25%).
• The key motives for sustainability were company values (61%), customer demands (42%), brand building (24%), and societal atmosphere and public debate (24%).
• Financial impacts such as cost savings, success in competitive tendering and access to financing were seen as the least important reasons to focus on sustainability.
• Focusing on corporate responsibility is expected to create benefits in the future, especially in terms of good reputation (84%), customer satisfaction (77%) and employer image (75%).
• SMEs’ limited resources were seen as the main challenge (69%) in their sustainability work. Companies need the most help in developing sustainability indicators (50%), creating sustainability strategies (38%) and sustainability reporting (37%).
• 51 per cent of the SME employers have set sustainability targets. Of these, 93 per cent also monitor their implementation.
• SMEs also work together with various stakeholders to promote sustainability. They engage in cooperation especially with other companies (55%), business and industry associations (45%) and education and training providers (36%).