ESG and SMEs: The Challenge at Hand
SMEs make up over 99% of all EU businesses and provide two-thirds of private sector jobs. Their environmental and social impact is significant—both as drivers of innovation and as contributors to risk. While some SMEs are leaders in renewable energy, the sector is also responsible for 64% of Europe’s industrial pollution and faces notable gaps in social and governance practices.
Despite new regulations like the Corporate Sustainability Reporting Directive (CSRD), EU Taxonomy, and Corporate Sustainability Due Diligence Directive (CSDDD), most SMEs are unprepared. This is due to limited resources, low awareness, and the perceived complexity of ESG compliance. Vocational Education and Training (VET) providers are uniquely positioned to close this gap by offering practical, accessible ESG learning and tools.
PEARL: A Project Designed for Impact
The Erasmus+ funded PEARL project, Promoting ESG Awareness and Risk Literacy in SMEs, responds to this challenge by empowering VET educators to build ESG competence across Europe’s SMEs. PEARL offers a structured Knowledge Framework, modular curriculum, and practical training resources tailored to real-world SME needs.
At its core, the project addresses the foundational barriers identified across five EU countries: lack of ESG knowledge, limited strategy, and resource constraints. PEARL ensures that both educators and SMEs can progress from awareness to action regardless of starting point.
What’s Inside the PEARL Project?
The PEARL project integrates co-creation, evidence-based research, and alignment with major EU competence models (EntreComp, GreenComp, and DigComp). It includes:
- A Learning Framework – defines the ESG competences SMEs need, based on extensive research and consultations.
- Modular Curriculum – delivers step-by-step content that VET educators can use as standalone courses or integrate into existing programmes.
- Training Resources & Tools – includes hands-on content and an ESG Risk Assessment App (coming soon) to help SMEs assess risk and take targeted action.
Everything is designed for clarity and simplicity, helping even the smallest firms build ESG understanding and implementation capacity.
What Did We Learn from the Research?
The PEARL team conducted country reports and 51 semi-structured interviews with SMEs, VET educators, and ESG experts in Türkiye, Denmark, Poland, Germany, and Ireland. Findings include:
- Low Awareness: 39 out of 51 respondents reported low ESG awareness in SMEs, especially on social and governance issues.
- No Strategy: 34 interviewees noted that SMEs lack formal ESG plans or policies.
- Top Drivers for Change: Customers (38 mentions) and competitive advantage (33) were the most common motivators, not internal culture or investor pressure.
- Key Barriers: 43 respondents cited a lack of ESG knowledge, 43 also highlighted time and financial constraints as major obstacles.
- Support Needs: SMEs need both financial assistance and structured ESG training each cited by over 35 respondents.
This evidence directly informed the structure and content of the PEARL curriculum.
Competences That Matter
PEARL’s curriculum is grounded in the Knowledge–Skills–Attitudes (KSA) model and draws from three key EU frameworks:
- EntreComp for responsible entrepreneurship and opportunity spotting.
- GreenComp for systems thinking and sustainable values.
- DigComp for ESG data management, digital collaboration, and reporting.
This structure ensures that learners don’t just absorb ESG knowledge, they build the skills to act and the mindset to lead sustainably.
What Comes Next?
PEARL’s six-module ESG curriculum is now under development and will be piloted with VET providers and SMEs:
- Introduction to ESG
- ESG Onboarding, Vision & Responsibility
- Risk Analysis & Materiality Assessment
- ESG Strategy & Implementation
- Reporting, Communication & Branding
- Sustainable Finance for SMEs
This will be followed by the launch of the ESG Risk Assessment App and a multilingual open-access Knowledge Hub. These tools will make it easier for SMEs across Europe to identify weak points, improve ESG performance, and align with EU priorities like the Green Deal and SDGs.
Join the Pearl Project
If you’re an SME, VET educator, policymaker, or ESG consultant, now is the time to engage. PEARL is building a pan-European community committed to equipping SMEs with the ESG skills needed to thrive in a changing world.
Learn more at esgforenterprise.eu
