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ESG advice for SMEs in China
Large European companies have worked with sustainability and ESG improvements over many years, and typically have strong teams and well implemented systems to ensure compliance with the ever-increasing regulatory demands. The situation for smaller companies is different, and for many it now feels like they must build the plane when it is already in the air: CSRD, CSDDD, CBAM, EUDR and so on demand reporting and action now – while the structures might not be in place.
European ESG reporting and due diligence requirements have implications for global operations and sourcing. Given Chinas strong position for manufacturing, the need for integration Chinese subsidiaries and partners is vast. Reading the regulatory documents can make anyone overwhelmed. The good thing is that most of the regulations allow for sensible phasing in.
Our main advice to SMEs who need to start with ESG work in China now is
1) Invest in educating your internal team. ESG work is not a one-off project which can be done by consultants.
2) Approach the topics based on materiality. Most of the regulations follow for starting the work by focusing on the most pressing issues before expanding the scope
3) Aling with Chinese local developments and regulations. Many sustainability topics are high on the agenda for local governments in China, and this can help turn the work from compliance focused to becoming a business opportunity.
4) Ensure smart IT system solutions. Data collection will be an ongoing activity, and both your HQ and the local operations will have to be included.
The large companies have developed best practices which smaller companies can benefit from. And sometimes being small might mean being more agile, and maybe it is easier to turn the regulatory demands into opportunities.
Reach out if you wish more details on ESG for European companies in China!
Contact us for help!
Reach out if you want support with your ESG efforts in China. At Danish Industry we have systems (in Chinese) and partners to help.
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Other ESG services
Below are some of our different ESG resources to help you with your ESG efforts in China.
Contact
Please contact Glen Mikkelsen or Heidi Berg for more information on ESG services.
Glen Mikkelsen
Managing Director
Danish Industry, China.
E-mail:
Click here to send email
M: +86 139 1778 4076
Heidi Berg
ESG and Sustainability Director,
Danish Industry, China
E-mail:
Click here to send email
M: +86 132 48 30 7281