A survey carried out by IoT company Small Data Garden Ltd earlier this year has gathered information on the challenges of sustainability reporting for companies of all sizes and other organisations. The survey involved environmental and sustainability managers, corporate executives, property managers and experts.

The EU Corporate Responsibility Directive, which entered into force at the beginning of 2024, will oblige large companies to report on their activities from an environmental, social and governance perspective. Reports under the new directive will have to be published early next year, after which the reporting obligation will gradually be extended to small and medium-sized companies as well.

This also applies to smaller companies that already have larger companies in their supply chain. Smaller companies will then also be required to commit to sustainability work and report on the results. The same is also required by investors. Managing sustainability is already opening up opportunities for cheaper and more diverse sources of financing.

Even in smaller companies there is a positive attitude towards sustainability work, but it is difficult to take advantage of. There is a lot of legislation, the directives are broad and changing and it is difficult to understand what should be done in practice. Therefore, sustainability work and the preparation of the associated reports require a lot of new skills, resources and investment on the part of companies. Information and consultancy services are available but the fragmentation of information and the collection of data relevant to the business pose challenges.
-“We wanted to find out how to get past the EU directive chaos so that things would flow smoothly into the daily business”, says Timo Liukko, partner at Small Data Garden Ltd.

The first step is to get information, clear examples and wireframe templates on what is involved and where to start reporting, and to find out what is an adequate level and scope of reporting. Simple examples are also needed to assess what is relevant to the business and how to calculate the carbon footprint. A separate issue is how to develop human resources and related accountability and what is good management, reporting and monitoring. Monitoring your own supply chain and the life cycle of products is an additional challenge.

-We ourselves have faced sustainability related obligations through our stakeholders and started to think about how we could get the data collected in one place, in a clear format for “non-engineers” that is easy to share, says Sander Soitu of Small Data Garden Ltd. -Based on these ideas and discussions with companies we have created IoT solutions and tools to help get started and track sustainability targets. They also help to get more accurate information than “district heating bills and power usage bills”, which gives us the insight to develop the right things and monitor progress more closely. We have also developed a simple carbon footprint calculator that calculates various emission categories and targets.

– One key issue is the shared understanding and vision of the company’s management team and key personnel on sustainability issues. This is created through concrete actions such as finding out how we or our goods move, gathering information and realising things together”, adds Soitu.

We also need to pay attention to whether our partners share similar values with us. Thinking about the impact of sustainability beyond the company’s bottom line and what additional business it could bring are also important aspects.

Management and key people need to be aware that sustainability data strongly supports management and creates a good and sustainable corporate culture. Linking sustainability objectives to corporate strategy and business operations ensures that they are monitored and achieved.
-Anyone can start collecting data today. Our solutions provide peace of mind that your company’s sustainability goals are being met and that your actions are based on concrete data. It’s all about tangible things and getting the practical results that drive you towards the goal”, says Soitu.