Online tool for self-assessment of SME sustainability orientation
The Slovenian Entrepreneurship Fund has developed the so-called “ESG tool” for start-up and scale-up companies and other innovative micro, small and medium-sized enterprises (SMEs) – an advanced online tool for self-assessment of sustainability orientation. The ESG tool enables companies to assess their sustainability orientation and identify potential environmental, social and governance risks of their operations.
Purpose of the tool
The ESG tool focuses on various aspects of sustainability, namely:
- environmental aspects (e.g. resource consumption, waste management),
- social aspects (e.g. diversity and equal opportunities, health and safety at work and in relation to customers, etc.) and
- governance aspects (e.g. privacy and data protection, tax management, etc.).
Key characteristics
Questionnaire
The questionnaire is based on 30 short questions in the field of managing environmental (E), social (S) and governance (G) aspects of business, namely from the following areas:
| Environmental (E) | Social (S) | Governance (G) |
|---|---|---|
| Energy consumption from renewable sources | Training and education programs | Fight against corruption |
| Sustainable water consumption | Local communities | Anti-competitive conduct |
| Sustainable consumption of raw materials | Diversity and equal opportunities | Tax management |
| Greenhouse gases and emissions | Customer health and safety | Public policy |
| Waste management | Non-discrimination | Privacy and data protection |
| Circular business model potential | Freedom of association and collective bargaining | Economic performance |
| Commitment to circular transformation | Child labor | Revenue from sustainable products and services |
| Infrastructure for circular reuse | Sustainable criteria for customers | Research and development |
| Impact of business on biodiversity and ecosystems | Health and safety at work | Sustainable development reporting |
| Sustainable criteria for environmental assessment of suppliers | Prevention of work-related accidents and health hazards | Implementation of a sustainable strategy |
Reasons for creating the ESG tool
For the transition to a low-carbon, more sustainable, resource-efficient, and circular economy and society (Agenda 2030, Paris Agreement, European Green Deal), sustainable financing or the redirection of public and private investments into sustainable economic activities is crucial.
Venture capital investors and large companies, which are often customers/business partners of start-up and scale-up companies, are increasingly inclined to cooperate and connect with those start-up and scale-up companies that consider broader environmental, social, and governance factors (i.e., ESG factors – environmental, social, and governmental factors) in their operations, whereby:
- environmental factors relate to identifying the positive or negative impact of a company’s operations on climate change, greenhouse gas emissions, resource consumption (energy, water, raw materials/materials), waste and pollution, biodiversity and ecosystems, air quality, etc.,
- Social factors refer to identifying the positive or negative impact of a company’s operations on health and safety at work, working conditions in the company, diversity of employment, customer relations, care for the local community and society, underprivileged groups, human rights, etc., and
- governance factors relate to identifying the positive or negative impact of a company’s operations on integrity, values and ethics in the company, prevention of corruption, risk management, structure and diversity of management in the company, transparency of the company, etc.
Start-up and scale-up companies can, by identifying and incorporating ESG factors into their business processes:
- acquire new investors, customers, or business partners,
- reduce production costs or other operating costs and, consequently, increase revenues, and
- attract highly skilled personnel – younger generations are more inclined to work in sustainably conscious and responsible companies.