November 10, 2022

Helps small and medium-sized companies with sustainability reporting

In the years to come, businesses will face more and more comprehensive demands related to sustainability. Small and medium-sized enterprises are no exception. NSRS - Nordic Sustainability Reporting Standard - has been developed by the accountancy associations in Norway, Sweden, and Finland to help SMEs face these demands, and make their work easier.

The new standard also makes it possible to report on sustainability for small and medium-sized enterprises, says Ronny Thomas Jenssen, divisional director for large customers and specialist advisory at SpareBank 1 Regnskapshuset SMN in Trondheim.

- Small and medium-sized enterprises make up a large proportion of Norwegian workplaces and Regnskapshuset’s customer portfolio, and from a sustainability perspective, it is crucial that these enterprises also work to reduce their carbon footprint.

- Contributing and making sure that SMEs in our region are successful is part of SpareBank 1’s pledge and a social responsibility that we, as promoters of the green shift, take very seriously.

Reporting for everyone

During 2022, SpareBank 1 Regnskapshuset has helped several customers with sustainability reporting in line with the new standard. Among the companies that have reported are Tise AS and EW Glass and Plast AS.

- These are customers with quite different business models, accounting advisor Fredrik Schjetne Bekken points out.

- Though different, the companies have a common treat; they want to become more sustainable and work towards integrating sustainability into their strategies, management models, and their business. We are proud to be able to assist them with that, says Bekken.

In the early phase, sustainability reporting was mainly used as a marketing tool to communicate the company's "sustainability performance" to external stakeholders. Now we see that sustainability reporting is also used as a tool for companies to achieve their objectives within environmental, and social factors, and corporate governance. Sustainability reporting is a result of market expectations and international and national regulations. The regulation solely affects larger enterprises at the time being, but will in the long term, directly or indirectly, affect small and medium-sized enterprises.

- Surveys carried out in Norway indicate that companies that take sustainability seriously attract more customers, a more competent workforce, and consequently increased income. On the opposite side, you also see that the environmental “worst-cases” lose customers and income because of the lack of adaptation and contribution to sustainable development, says Jenssen.

Combined sustainability concept

Sustainability reporting includes detailed disclosure on three topics: environmental, social, and economic/corporate governance matters.

- An important part of sustainability reporting includes disclosing the company’s emissions in form of energy and climate accounting. Many people, however, misunderstand sustainability as only being related to environmental matters, but the term has several sides, says Jenssen. - The companies' reporting involves, among other things, reporting on climate risks and opportunities and key indicators related to equality and diversity in the workforce, he points out.

- In the future, sustainability reporting will become increasingly important, in order to win tenders, attract employees, and get better interest rates.

Managing director Erik Weisethaunet of EW Glass & Plast AS is among those who welcome a focus on sustainability. The company supplies glass sheets, plastic, fittings, and accessories to customers all over the country, and Weisethaunet believes that focusing on sustainability is important, both in terms of the environment and to ensure a profitable operation in the years to come.

- We want to meet current and future requirements, both from customers and authorities, says Weisethaunet.

- Through NSRS reporting we have obtained an overview of our good and not-so-good sides related to sustainability and have been made aware of areas we had not previously thought about, he says.

- In addition, we now have an overview of our emissions and will be able to use this externally, for example in tenders, but also internally to develop action plans to reduce emissions, he states.

Facilitating second-hand sales

CEO and Co-founder, Eirik Frøyland Rime, at Tise AS agrees. The company develops the service Tise, a digital reuse platform where private individuals can buy and sell clothes, shoes, and all sorts of different items. They also run the online store Tise Basics, which sells sustainable products that are not as easy to buy second-hand, as well as the Second Chance concept for the sale of samples and returned goods that Norwegian clothing brands cannot sell themselves.

- The focus on sustainability is central to Tise AS' business model and is an essential driving force for our growth and path to profitability, says Rime.

- Tise AS wants to help people to live more sustainably by making the buying and selling of used clothes something that most people prefer. We recognize the circular economy as a megatrend that can make a positive contribution to the climate crisis and facilitating an easy buy-and-sell-service of used items is an important part of solving the climate crisis, he says.

What is the background for the collaboration with SpareBank 1 Regnskapshuset SMN AS on sustainability reporting?

- Sustainability reporting is an exciting new initiative that our accountants at SpareBank 1 Regnskapshuset have worked a lot on. It is important for Tise to be a role model when it comes to the sustainable operation of the organization, so we were enthusiastic when we were asked to be involved as testers of this concept, says Rime.

- We hope that the sustainability report can help us find the parts of the organization where we can reduce our own carbon footprint. We believe it would be of great value if the sustainability report could become a standard that could also help other companies to reduce their carbon footprint, he concludes.

Written by Kjell Jørgen Holbye.

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