How to prepare your SME for the EU taxonomy?

How to prepare your SME for the EU taxonomy?

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Understanding how to prepare your SME for the EU taxonomy is an essential step in today's sustainability-focused business landscape. While the EU's taxonomy for sustainable activities doesn't currently impose mandatory reporting requirements on small and medium businesses (SMEs), these businesses can still benefit from familiarizing themselves with it. The taxonomy acts like a guidebook, defining what activities qualify as environmentally sustainable. By understanding this sustainability framework, SMEs can position themselves favorably in supply chains that are increasingly focused on sustainability. This can give them a competitive advantage and improve their access to green finance.

A Practical Approach to the EU Taxonomy

For SMEs, the EU's taxonomy for sustainable activities can seem complex. However, a practical approach is key. While SMEs might not be obligated to comply with the taxonomy yet, focusing on core business activities and aligning them with broad sustainability goals can be beneficial. This could involve simple measures like reducing energy consumption or using recycled materials. By taking these steps, SMEs can demonstrate their commitment to sustainability and potentially gain a competitive edge in the future, especially as environmental considerations become more important for consumers and investors.

Understanding the EU Taxonomy

The European Union (EU) has established a classification system called the EU Taxonomy to help businesses and investors identify environmentally sustainable economic activities. This system provides clear criteria for what qualifies as sustainable, aiming to promote transparency and encourage sustainable investment that aligns with the EU's environmental goals. Essentially, it acts like a common language for businesses to communicate their sustainability efforts and for investors to make informed investment decisions.

Voluntary Reporting and the Future of Sustainability Reporting

Although SMEs are not currently required to comply with the EU Taxonomy, voluntary reporting can provide a multitude of benefits. By proactively aligning their business practices with the taxonomy, SMEs can signal their commitment to sustainability, gain a competitive advantage, and potentially improve access to green finance. Furthermore, preparing for the future of sustainability reporting can help SMEs stay ahead of potential regulatory changes and position themselves favorably in a business environment that is increasingly focused on sustainability.

Steps for SME Preparation

Preparing your SME for the EU taxonomy involves understanding the criteria for sustainable activities, aligning your business practices with these criteria, and communicating your sustainability efforts effectively. Simple measures such as reducing energy consumption, using recycled materials, and investing in sustainable technologies can go a long way in demonstrating your SME's commitment to sustainability. By taking these steps, SMEs can not only comply with the EU Taxonomy but also leverage it as a tool for gaining a competitive advantage and improving access to green finance.


Preparing your SME for the EU taxonomy is not just about compliance. It's about understanding and embracing the shift towards sustainability in business practices. By aligning your SME with the EU's sustainability goals, you can position your business favorably in the supply chain, gain a competitive advantage, and access green finance. So, start preparing today for the future of sustainability reporting and reap the benefits of a sustainable business model.

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