How SMEs Are Leveraging ESG to Cut Costs and Win More Business

OEMs and large Tier 1 suppliers are making ambitious carbon neutrality pledges. With supply chain (Scope 3) emissions making up 60–70% of their total carbon footprint, they’re increasingly requiring ESG compliance from their entire supply chain.

For small and mid-sized manufacturers (SMEs), ignoring this trend is like ignoring a check engine light—it won’t fix itself. ESG is no longer just for big corporations. It’s now a proven tool for driving revenue, reducing costs, and strengthening customer loyalty.

The good news? Most SMEs are already doing ESG-related activities—like keeping workers safe, supporting employee growth, and adhering to an ethical business practice—they just haven’t organized it into formal policies, goals, or reports that align with ESG reporting standards. Plus, with the right support, implementing ESG doesn’t have to be expensive or complex. In most cases, your customers don’t expect perfection—they expect awareness, goals, a plan, and transparency.

Taking Action – The Six Pillars of ESG

1. Foundational Knowledge: Educate yourself and your team. Host a short training or share ESG articles to build a common understanding. Clarify what ESG means in your industry - and why it matters to customers, employees, and your bottom line. Free overviews are available at globalreporting.org and cdp.net.

2. Materiality Awareness: Identify which ESG issues matter most to your business and stakeholders. Talk to customers, employees, and suppliers to prioritize what’s most relevant. GRI’s sector-specific guidance is a great starting point for manufacturers.

3. Self-Assessment: Complete a basic ESG self-assessment. Evaluate how your business performs in key areas and compare that to what matters most. Free tools are available at aiag.org and ecovadis.com. If those seem complex, reach out to the author for a free, simplified version.

4. Goal Setting: Set meaningful, measurable goals that focus on high-priority areas. Examples: “Reduce energy use by 15% in 18 months” or “Implement a supplier code of conduct by year-end.” Goals don’t have to be perfect—they just need to be meaningful, trackable, and achievable.

5. Strategy and Action: Build your ESG roadmap. Break down goals into clear next steps, such as updating HR policies, switching to LED lighting, or improving supplier vetting. Assign ownership to team members to ensure accountability. Start small—many improvements are low-cost and easy to implement.

6. Transparent Communication: Share your ESG efforts openly. Add them to sales decks, your website, or an annual ESG summary. Being honest about your progress—and what comes next—builds trust. Transparency is essential to winning and keeping customers.

Why It Matters to SMEs

ESG isn’t just about compliance or meeting customer requirements—it’s about building a smarter, stronger business. SMEs that embrace ESG are:

• Growing revenue 10% faster than peers (McKinsey)

• Reducing costs by an average of 16% (Harvard Business Review)

• Improving employee productivity by 17% (Gallup)

With the right partner, ESG can be simple, impactful, and profitable.

At True North Sustainable Growth, LLC, we help SMEs build right-sized, cost-effective ESG programs that meet customer expectations, reduce risk, grow your business, and even save some money.

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Robert Ciranna is a certified ESG specialist and President of True North Sustainable Growth. He is the author of The Six Pillars of Sustainable Growth. He brings a manufacturing background in engineering, global sales, and sustainability. He can be reached at bob@b2bsalesgrowth.com or 248-974-0851.