ESG Reporting in 2026: Metrics and Formulas Every Small Business Needs

ESG used to be a term that only seemed to matter to someone else.

In 2026, it is a spreadsheet on your desk, a question from your bank, and a line in your biggest client’s contract.

New EU rules, stricter investors, and more attentive customers mean that even small firms now meet ESG in their inbox, not just in policy papers.

ESG reporting in 2026: what has changed

ESG reporting is now the way a company explains its environmental, social, and governance impact using clear, repeatable data. From 2026, more European companies must publish structured sustainability information under the Corporate Sustainability Reporting Directive (CSRD), and this pressure flows straight down their supply chains to smaller firms.​

Large listed companies, banks, and some non‑EU groups active in Europe are already reporting using European Sustainability Reporting Standards (ESRS).​ In practice, this means that even small and mid‑sized enterprises (SMEs) will face detailed ESG questionnaires from customers, lenders, and investors in 2026.​

Why ESG metrics now matter for every SME

In 2026, ESG is no longer just a branding exercise; it is tied to capital, risk, and market access.​European ESG bond and loan volumes passed hundreds of billions of euros by late 2024, showing that capital is actively chasing credible sustainability performance.​

For SMEs, strong ESG metrics can:

• Help keep key clients who must report on their value chain emissions and social risks under CSRD.​

• Improve access to bank finance, as lenders increasingly integrate ESG data into credit decisions and pricing.​

• Support talent attraction and retention, especially among younger workers who care about employer values.​

Recent European research finds a positive link between higher ESG scores and better financial performance, measured by indicators such as return on assets and profitability.​Good ESG reporting is therefore not a side project; it is part of long‑term business value and resilience.​

Frameworks and rules shaping ESG reporting in 2026

ESG reporting in 2026 is defined by a small group of powerful frameworks and legal standards. Understanding them helps you choose metrics and formulas that will still make sense in a few years.​

Key pillars:

• CSRD (Corporate Sustainability Reporting Directive): Expands detailed sustainability reporting obligations to approximately 50,000 companies across the EU, with a phased rollout over several reporting years.​

• ESRS (European Sustainability Reporting Standards): Set out the specific topics, disclosures, and data points large companies must report, including climate, pollution, workers, and governance.​

• VSME standard: A voluntary, simplified ESG standard launched to help SMEs respond to data requests without adopting full ESRS complexity.​

The VSME standard is especially important for smaller suppliers because it provides a structured yet realistic set of metrics and disclosures. ​Using it as a backbone makes it easier to plug your SME data into the systems used by large corporate customers.​

Environmental metrics: simple 2026‑ready formulas

Environmental metrics track how your operations affect climate, energy, water, and waste. In 2026, buyers and lenders will expect at least basic climate and resource data from serious suppliers.​

1. Greenhouse gas emissions (Scope 1 and 2)

• Scope 1: direct fuel use (company vehicles, on‑site combustion).

• Scope 2: purchased electricity and heat.

• Basic formula for a fuel type:

  • Emissions (tonnes CO₂e) = Fuel used × Emission factor.​

  • Example: 10,000 litres of diesel × 2.68 kg CO₂e per litre ≈ 26.8 tonnes CO₂e.​

2. Carbon intensity per euro of revenue

• Formula:

  • Carbon intensity = Total emissions (tonnes CO₂e) ÷ Annual revenue (euros).​

• This allows you to show improvement even when turnover grows, which is key for SMEs with rising sales.​

3. Energy consumption and intensity

• Track electricity and gas use in kilowatt‑hours (kWh) per year.​

• Formula for intensity:

  • Energy intensity = Total energy use (kWh) ÷ Floor area (m²) or ÷ number of employees.​

4. Water and waste metrics

• Track cubic metres of water and tonnes of waste per year.​

• Formula for recycling rate:

  • Recycling rate (%) = (Recycled waste ÷ Total waste) × 100.​

Track your key ESG numbers in one place with our environment dashboard for SMEs, designed for simple monthly updates.​

Social metrics: people, safety, and inclusion

Social metrics say how you treat employees, contractors, and communities. In 2026, many ESG questionnaires give equal weight to workers’ rights and safety as to emissions.​

1. Employee turnover rate

• Formula:

  • Turnover (%) = (Number of leavers in year ÷ Average number of employees) × 100.​

• High turnover can signal poor working conditions or a weak culture, and buyers are paying attention.​

2. Lost Time Injury Frequency Rate (LTIFR)

• Formula:

  • LTIFR = (Number of lost time injuries × 1,000,000) ÷ Total hours worked.​

• Using this standard formula lets clients compare safety performance fairly across suppliers.​

3. Diversity indicators

• Example: share of women in management.

• Formula:

  • Share (%) = (Number of women in management ÷ Total managers) × 100.​

• Other indicators can mirror your context, such as age mix, migrant workers, or part‑time versus full‑time employees.​

4. Training and development

• Formula:

  • Training hours per employee = Total training hours ÷ Number of employees.​

• This simple figure shows whether you invest in skills and long‑term competence.​

Want to see how this looks in practice? Visit our Knowledge Centre page for real examples and simple ideas you can adapt.

Governance metrics: how you make decisions

Governance metrics reveal how decisions are made, how risks are controlled, and how ethical behaviour is enforced.​ In a 2026 context, governance has moved beyond box‑ticking to evidence of real oversight and accountability.​

1. Leadership or board independence

• Metric: share of independent members on your board or advisory group.

• Formula:

  • Independence (%) = (Independent members ÷ Total members) × 100.​

2. Code of conduct coverage

• Metric: share of staff and key suppliers who have signed your code of conduct.

• Formula:

  • Coverage (%) = (Number who signed ÷ Total targeted staff or suppliers) × 100.​

3. Ethics and compliance incidents

• Metric: number of confirmed breaches per year (fraud, harassment, bribery).​

• Normalised figure:

  • Incidents per 100 employees = (Number of incidents ÷ Total employees) × 100.​

4. ESG‑linked variable pay

• Metric: share of bonuses or variable pay tied to ESG targets.

• Formula:

  • ESG‑linked pay (%) = (ESG‑linked bonus ÷ Total variable pay) × 100.​

For practical next steps, explore the OECD governance principles as a clear global benchmark against which to measure yourself.

ESG, profit, and access to finance in 2026

The core question for many business owners is still simple: Does ESG pay? Across several European studies, firms with stronger ESG scores and better disclosure tend to show higher profitability and asset returns than peers with weak ESG performance.​

Investors and banks use ESG data as a proxy for management quality, foresight, and risk control.​ For SMEs, this can translate into better access to credit, preferential terms for ESG‑linked loans, and a stronger appeal to impact‑oriented investors or public funds.​

By 2026, many corporate buyers must report on Scope 3 emissions and social risks in their value chains.​Suppliers who can provide reliable, formula‑based ESG metrics will have a clear edge over those who respond late or with vague narratives.​

Practical next steps for 2026

Stepping into ESG reporting in 2026 does not require a legal department or a room of consultants. It requires choosing a small set of honest, repeatable metrics and calculating them using clear formulas.​

Concrete starting steps:

• Choose 5–10 core metrics across environment, social, and governance that match your sector and main risks.​

• Align with the VSME standard so that your numbers fit the expectations of larger, CSRD‑reporting customers.​

• Use simple tools first – a structured spreadsheet or a basic ESG platform, and update data monthly or quarterly.​

• Prepare for questions from banks and buyers by keeping documentation and calculation methods in one shared location.​

If you want a simple place to start, contact us through the Greennect Mini Audit form and select 5–10 core indicators for your business. Once you are ready to go deeper, explore 2026 Sustainability Reporting Trends to see how these metrics fit into the broader picture and what your next steps should be.