Are SMEs required to prepare an ESG report?
Most SMEs are not directly legally required to prepare a sustainability report – the 2026 EU Omnibus Package has further eased these direct obligations. In practice, however, there is growing indirect pressure from large corporate clients subject to the CSRD, banks (MaRisk 2023), and public tenders, all of which increasingly demand ESG disclosures and sustainability reporting.
Direct Reporting Requirements: Who Is Affected?
Companies must comply directly with the CSRD if they meet at least two of the following three criteria: more than 250 employees, over €50 million in turnover, or over €25 million in balance sheet total. The 2026 EU Omnibus Package increased these thresholds, resulting in fewer businesses being subject to direct reporting requirements than initially projected.
Indirect ESG Pressure on SMEs
Even without a direct regulatory mandate, SMEs are indirectly affected through three main channels: CSRD-compliant corporate clients require ESG data from their suppliers to assess Scope 3 emissions; financial institutions evaluate ESG risks in lending decisions following the MaRisk 2023 update; and public as well as private tenders increasingly implement strict sustainability criteria.
Conclusion: Taking Proactive Action Pays Off
SMEs that voluntarily publish a VSME report today are fully prepared for ESG requests, secure their supplier relationships, and improve their financing terms. With ESG Lift, your first compliant ESG report is ready in just 1–3 hours, starting from €590/year.
Are SMEs required to prepare a sustainability report? Direct obligations, indirect pressure from CSRD and banks u2013 the current 2026 legal framework for SMEs regarding ESG reporting.