Empowering SMEs: The Path to Effective CSR Implementation

Through three dedicated sessions led by Fleur Masterman, Head of GSH BPCE Networks at Natixis CIB, the Green Summit explored the keys to a successful CSR trajectory for small and mid-sized enterprises.

The aim was to identify the specific challenges they face, particularly in light of the new regulatory framework and increasing stakeholder expectations. The event also explored their integration within local territories, with a focus on the maritime and mountain sectors, both significantly affected by climate change.

By lowering the reporting threshold to 250 employees (down from 500 under the previous NFRD – DPEF in French), the CSRD (Corporate Sustainability Reporting Directive) significantly expands the number of companies subject to CSR reporting obligations in the European Union, now affecting around 50,000 firms compared to just 12,000 before.

While this regulatory surge, comprising approximately 1,100 data points, is sometimes viewed as an overwhelming burden, it can actually serve as a pivotal opportunity for integrating sustainability challenges into the overall strategy of small and mid-sized businesses. The CSRD, finally, often consists in enhancing and structuring existing CSR initiatives and commitments, that were already widely adopted by the company, leading to more impactful management of transition efforts.

In the first session, CSR specialists Christophe Caille, President of Rive Neuve, Germain Gouranton, Managing Director of Naldeo, and Wassim Daoud, CSR Director of Ponant, drew on their extensive experience as business executives, engineers and CSR director.

Discussions highlighted that the CSRD fundamentally focuses on impact and value creation. By encouraging companies to anticipate future developments, it prompts them to consider both macroeconomic and microeconomic factors. This approach not only helps structure efforts to mitigate risks but also identifies opportunities for growth.

In this respect, Christophe Caille emphasized that the CSRD should be viewed as a vital exercise in structuring CSR efforts for small and mid-sized enterprises, based on three key pillars: standardization, which provides a framework; measurability, which requires tangible, reliable, verifiable, and comparable metrics; and transparency, which mandates that CSR initiatives be grounded in concrete, auditable elements, and enabling comparisons between companies and across sectors. Together, these pillars form a robust defense against greenwashing.

"European companies seem to be better prepared than their Anglo-Saxon counterparts for future challenges due to the dual materiality analysis mandated by regulators - economic materiality, which assesses the impact of environmental and societal issues on business models, and impact materiality, which evaluates the company's effect on the environment and stakeholders." Christophe Caille.

By structuring CSR efforts, the CSRD allows companies to realize economic benefits that free up resources for business development, especially in innovation. First, efficiency: by managing resource consumption (raw materials, energy, water), companies can prevent supply chain disruptions and price volatility. By meeting the increasing compliance demands of banks, investors and insurers, they can also reduce financial costs and insurance premiums, which are increasingly tied to CSR criteria.

Secondly, resilience: by anticipating regulatory and other transition changes, companies can develop high-value services that strengthen client relationships and enhance their competitiveness. Finally, attractiveness: enhancing the company's image among stakeholders, particularly its employer brand.

Germain Gouranton introduced a key success factor: prioritization. In selecting the themes on which the company decides to report - known as ESRS - the company should focus on what is impactful and material to its business operations, model, locations, and ecosystem.

"A company cannot tackle every issue across all assets and production sites simultaneously. A prioritization rule applies both within the company and at a macro level."

For instance, Naldeo focuses on water consumption, dependence on natural resources, energy competitiveness, CO2 emissions, protection of life and nature, and adaptation to climate change and physical hazards, addressing only projects that have a positive and significant impact within the taxonomy. This addresses particularly small companies with manufacturing processes and larger industries.

A second crucial point was unanimously highlighted by the panelists: the CSR approach must be systemic and holistic, engaging all employees, activities, and production sites. This requires a strong leadership commitment, as executives need to present the CSR strategy as an integral part of the company's general strategy. This ensures that teams can fully engage and see the benefits for both the company and their daily work, rather than viewing it as a constraint or a simple (and maybe even optional) add-on.

This perspective was widely shared by Wassim Daoud, CSR Director at Ponant, a French cruiseship operator that aims to become a leader in sustainability within the tourism sector. “A good organization and resource identification are crucial to achieving ambitious CSR objectives. Pragmatism is key, defining who has the expertise to tackle each issue and who will sponsor initiatives.”

It is also vital to engage external stakeholders in the process, fostering a cooperative approach to ensure that CSR efforts create real value for both the company and society, starting with suppliers, who are increasingly expected to align their efforts with their clients’ commitments.

"The underlying momentum of the CSRD has been set in motion for the 50,000 largest companies in Europe. It will extend to their suppliers, who are true partners in a spirit of cooperation. This represents a significant transformation for our businesses. SMEs can either see it as an opportunity and embrace it, or endure it." Christophe Caille.

Fundamentally, CSR is an exercise in prioritization: prioritizing issues and prioritizing action plans. A key challenge is to engage governance, employees, and all stakeholders in designing and deploying the CSR strategy.

An application workshop invited participants to consider how to build a CSR strategy step by step through a simulation involving a fictitious company. Participants were invited to identify priority issues and corresponding action plans. The workshop benefited from the experience of David Petrovic, General Director and Marion Ringotte, CSR Manager of Estémi, a French renovation group, which CSR journey began in 2017 and accelerated two years ago as the company grew closer to regulatory thresholds.

While transition issues must be considered on a global scale, they also need to account for the unique characteristics of local territories - geographic, environmental, social, economic, cultural, and political. For this third session, we focused on two sectors particularly affected by climate change: the marine and mountain economies.

Catherine Piante marine program manager at WWF France, Nils Joyeux, CEO and co-founder of Windcoop and Dominique Thillaud, General Director of Compagnie des Alpes, presented insights into the specific challenges within their sectors and the concrete solutions they are implementing.

Catherine Piante discussed the pressures that maritime economic growth places on marine ecosystems, highlighting the Posidonia seagrass meadows that WWF aims to fully protect by 2030 in the Mediterranean. This plant acts as a natural carbon sink, but it is threatened by port construction, land pollution, trawling, and increasingly, by the anchoring pressure from large pleasure boats. Between 10% and 30% of the Mediterranean Posidonia meadows have disappeared, with a 30% loss in just seven years in the Gulf of Juan. These meadows are crucial ecosystems that provide habitat for juvenile fish, produce oxygen, avoid coastal erosion and many other services; if they collapse, all related ecosystems will be impacted.

Nils Joyeux shared that Windcoop manufactures and operates cargo ships equipped with sails to reduce CO2 emissions in maritime freight. For example, the sails on the ship developed for Ariane Group to transport the Ariane 6 rocket reduce its fuel consumption by one-third. The route between France and Madagascar, primarily for transporting spices, will be serviced by a vessel that emits 60% less CO2 than existing services on that route.

Dominique Thillaud remarked that “there are no climate skeptics in the mountains.” The impacts of climate change are already evident in the Alps, which heavily rely on the ski economy, with glacier melting and ski resorts closing. The ski area operated by Compagnie des Alpes has a 50-year visibility but already explores a transition that serves as a socio-economic generator.