Hamburg When Barbara Möllmann started her job at the livestock logistics company Venneker in Nordkirchen, North Rhine-Westphalia, two years ago, she had to be inventive. “There were no structures or data in terms of sustainability and corporate social responsibility that I could have drawn on,” says the sustainability manager. “I started from scratch, so to speak.”
Of course, sustainability has long been important for the family business: The new company headquarters, which was moved into in 2018, is equipped with a photovoltaic system and heat pumps, professional quality management is just as standard as compliance with the EU organic regulation for the transport and trade of pigs and cows. After all, animal welfare is a very sensitive issue in the food industry. “We always wanted to be pioneers in order to be able to draw the positive effects from these topics early on,” says Möllmann.
In the meantime, however, the topic of ESG has reached a new quality: While previously only large corporations had to account for their ecological (E) and social (S) standards as well as their corporate governance (G), this obligation increasingly affects medium-sized companies too – from year to year more (see short text gallery below).
But how do you translate the still very vague ESG criteria into the working reality of a livestock dealer and transporter with around 225 employees and a three-digit million turnover? How can environmental protection, social commitment and responsible corporate management be established in an economically viable way? And how do you embark on the path to climate neutrality without overdoing it? “Our auditor pushed us in the right direction,” says Möllmann.
Because the pressure is not only growing from the regulatory side. Customers and business partners are asking more and more about our efforts in environmental protection and social commitment. Every house bank now wants to know how sustainable their customers’ business model is when they grant a loan – no matter how large the company’s turnover is.
What to expect when small and medium-sized companies
In addition, the Supply Chain Due Diligence Act, which has been in force since 2021, requires companies with 3000 employees or more to check both the manufacture of their products and their business partners from a human rights and environmental protection perspective, reduce risks and prevent injuries. Violations can result in fines of up to 800,000 euros. Not to mention the image damage that occurs when unethical behavior becomes public knowledge.
Indirectly, the new rules also affect many smaller companies that are not required to report themselves, but are in the supply chain of large companies. “You are required by the client to also comply with the relevant guidelines,” says the auditor Dirk Schulte-Uebbing, who has specialized in sustainability issues with his auditing company Dosu.
The Dortmund-based company has been working climate-neutrally since 2021. Building on its own experience, it offers services related to the transformation to climate-neutral operation, advises on the development of a sustainability strategy, creates and checks sustainability reports and helps with the selection of suitable CO2 compensation measures. “In times of scarce resources, companies are overwhelmed, especially since every situation is different,” says Schulte-Uebbing. Many still push the topic away from themselves. “But sooner or later everyone has to deal with it,” says Schulte-Uebbing.
Use government funding
There are now numerous low-threshold counseling services, which are often state-funded. For small businesses in particular, energy advice can be a sensible first step that is at least partially self-financing thanks to the savings potential. The state of North Rhine-Westphalia, for example, offers all companies with at least one full-time employee a subsidy of a maximum of 400 euros per day for so-called transformation consulting with one to twelve consulting days. You are free to choose the advisory institution, as long as it can be proven that the focus is on sustainability issues.
In all federal states, there is a way to go to the Chamber of Commerce or Chamber of Crafts – or directly to a specialized sustainability consultant. Here, however, companies should pay attention to proof of qualification, since the job title is not protected. “The goals that follow from the consultation must also fit the company and remain financially feasible,” says Andreas Nöh from the Warendorf-based consulting firm MSA-B. For example, a craft business with ten employees that only works locally at the customer’s home or also at other companies does not require a code of compliance.
To make the first step
It is crucial to take the first step. “Banks and business partners know that certification according to recognized standards or setting up a reporting structure takes time,” says Nöh. “But it is possible to have the project certified by the accompanying consulting company or auditor. This often gives the customer or partner the necessary peace of mind to really get started.”
Since the EU has primarily appointed auditors to accompany and check sustainability reports, large companies such as PwC, KPMG, Deloitte and EY already have an extensive range of services for medium-sized companies. But more and more smaller, regional auditors are catching up when it comes to sustainability. “Where it makes sense, we suggest that our clients take EMAS certification as a first step, because everything else follows from that,” says Schulte-Uebbing.
If management is not convinced of the implementation of ESG criteria, little will change in the company. Dirk Schulte-Uebbing, auditor
EMAS is the English abbreviation for the unwieldy term “Community system for environmental management and environmental audit”. If you want to achieve certification, you have to set up your own environmental management system that meets the requirements of the international environmental management standard ISO 14001. Sounds complicated, but this makes your own activities measurable and comparable. The establishment of an environmental management system creates transparency in terms of energy and material efficiency, emissions, waste water and waste. In addition, the company sets itself goals to become better every year in terms of environmental protection. So that the management really sticks to it, the achievement of goals is audited annually by an external auditor.
The Venneker Group has chosen exactly this path. “The auditing company Dosu knows our company through and through and knew we could do it,” says Möllmann. However, the implementation was not possible without further external help and so the medium-sized company called in the consultant Andreas Nöh.
Even at the kick-off event, it became clear that everyone would have to roll up their sleeves in the next few months, from the in-house technician to the management. Countless data had to be collected, digitized and evaluated in all departments, sustainability knowledge was built up, a collection of ideas was compiled, and a catalog of goals was formulated.
recruit employees
And finally everything had to be implemented in the company. “One hurdle was certainly bringing it closer to those employees who had not previously had any contact with these topics. Especially since it affects all areas and people in the company,” says Möllmann.
Venneker is satisfied with the result: Instead of the predicted twelve to eighteen months, Venneker managed to obtain EMAS certification in just nine months. Since then, new structures have emerged that make it easier to understand all projects and allow employees to be more closely involved. Customers are responding positively and even business partners are asking for advice on their own sustainability plans. “We also found in talks with banks that our certification is a real milestone that ensures that the institutes are happy to support us with financing,” says Möllmann.
For Venneker, the entire process resulted in a concrete timetable for the next ESG steps. Although the medium-sized company does not yet have to do so from a purely legal point of view, the first sustainability report is to be prepared soon. In the long term, the heavy animal transport trucks are to run on hydrogen.
From the point of view of auditor Schulte-Uebbing, a clear ESG concept is a decisive criterion for future company success – even in medium-sized companies. It is important that the management not only dictates the change, but also sets an example: “If the management is not convinced of it, little will change in the company.”
More: This is how investors benefit from the climate change business