Sustainable business

Sustainable business refers to business practices that take into account not only economic impacts but also the effects of operations on the environment and society. Sustainable business aims to ensure that, in addition to generating profit, company's activities minimize negative environmental impacts and promote social well-being.

Sustainable business brings many business opportunities. Responsible practices help companies gain access to supply chains, as businesses are setting increasingly higher responsibility requirements for their subcontractors. It affects the availability and cost of financing, as banks and investors actively monitor the sustainability of their investment and loan portfolios. Responsibility provides a competitive advantage in recruiting employees and meeting the expectations of environmentally conscious consumers, as well as enhancing a company's market value.

It is essential to focus on sustainability issues that are directly related to the company's core business. Company can leverage to achieve a competitive advantage – for example, a transportation company addressing the amount of emissions generated, and a construction company focusing on green building and offering energy efficient solutions. As regulations increase, responsibility becomes at least a prerequisite for a company's existence but can, at best, be a source of competitiveness and sustainable growth.

Terms related to sustainable business can sometimes present challenges. Below is a vocabulary presented on this page.

Carbon footprint = Greenhouse gas emissions caused by a specific product, activity or service.

Circular economy = An economic model that does not continuously produce more goods but rather bases consumption on the use of services instead of ownership, as well as sharing, renting, and recycling goods.

Green transition = The shift from a fossil fuel-based economy to an ecologically sustainable economy, where growth doesn'y rely on the overconsumption of natural resources.

Corporate responsibility = The ecological, social, and economic responsibilities that a company bears in relation to the surrounding society.

CSR (Corporate Social Responsibility) = The social responsibility of companies, often abbreviated as corporate responsibility. This term emphasizes how a company affects society and how society affects the company.

CSRD (Corporate Sustainability Reporting Directive) = A directive that will come into force in the European Union in 2024, requiring large companies to publish their sustainability data. The section “Guidance on Corporate Responsibility and Reporting” discusses the directive's impact on SMEs.

ESG (Environmental, Social, Governance) = An acronym that stands for environmental, social responsibility, and good governance. The ESG term is used particularly in the financial sector, so it may appear when seeking financing in the form of ESG goals or ESG metrics.

SDG (Sustainable Development Goals) = The 17 sustainable development goals published by the UN (United Nations) aimed at guiding the future of development, to which all countries in the world have committed.

VSME (Voluntary Sustainability Reporting for SMEs) = is a simplified reporting standard that is compatible with the CSRD/ESRS. 

Many Finnish SMEs are already operating responsibly in various ways, so sustainability reporting is an excellent way to transparently communicate their responsibility to others. Both financiers and consumers prefer to engage with responsible companies, and employees value responsible and transparent employers.

Through sustainability reporting, a company can gain a competitive advantage by highlighting the sustainability of its operations. In areas where development is needed, reporting provides a useful tool for improving the business. It helps understand the business's impacts and identify measurable goals for advancing responsible business practices, guiding strategic decisions.

The EU's Corporate Sustainability Reporting Directive (CSRD), which came into force in 2024, requires large companies to report according to certain standards and will expand to include listed SMEs starting in 2026. While SMEs are not directly obligated to report, some may need to do so due to tightening sustainability requirements from large corporate clients and other stakeholders. Although the majority of SMEs currently do not have mandatory sustainability reporting obligations, it is advisable to start reporting on a smaller scale and gradually increase the scope of reporting year by year.

VSME (Voluntary Sustainability Reporting for SMEs) is a simplified reporting standard that is compatible with the CSRD/ESRS. VSME is suitable for voluntary sustainability reporting by small and medium-sized enterprises. It allows companies to report only on the topics that are relevant to their operations. VSME has also been created as a way for SMEs to share sustainability information with larger companies that have mandatory reporting obligations.
Download the VSME reporting template (Excel) here(external link, opens in a new window).

• A small B2C company or an early-stage B2B company
• The company has no significant legal issues and is not seeking major funding
• The company has no own production facility and does not use significant amounts of raw materials
• The company has no major social impacts or a large number of employees
• The company does not have its own sustainability strategy and does not use sustainability claims in its marketing

• The company is part of the supply chain of a larger company subject to mandatory reporting or a listed company, and needs to provide sustainability information to its customer
• The company has a sustainability programme and has already collected the data needed for a more extensive report
• The company’s operations have significant (positive or negative) impacts on the environment, water bodies, employee wellbeing, society, etc.
• The company has identified that climate change poses significant risks to its operations
• The company uses sustainability claims in its marketing and aims to achieve a competitive advantage through responsible operations

For more information about sustainability reporting, contact us by email: outi.toivanen@chamber.fi

The circular economy refers to an economic model where new goods are not continuously produced, but consumption is based on sharing, renting, and recycling instead of ownership. Existing materials and products are utilized for as long as possible. The circular economy helps companies operate more self-sufficiently and find savings by utilizing material by-products.

Sitra has published a handbook for developing circular economy business practices, which introduces various business models for the circular economy. The handbook contains information, examples, and practical tools to implement the transition to a circular economy within a company.

Sustainable Growth from Circular Economy Business Models - Sitra(external link, opens in a new window)

Finnvera grants climate loans to Finnish companies that promote, for example, energy efficiency or the use of environmentally sustainable materials.

Climate and Environmental Loan - Finnvera(external link, opens in a new window)

Business Finland provides energy aid to promote energy savings, energy production, and the efficient use of energy.

Energy Aid- Business Finland(external link, opens in a new window)

Many universities and universities of applied sciences offer free courses and training on sustainable business for entrepreneurs. The courses can be completed independently online and provide extensive tools for creating sustainability strategies, among other things.

Aalto University’s open and free course, "Basics of Sustainable Business," offers a comprehensive package on sustainable business along with concrete tools for creating a sustainability strategy.

The New Sustainability in Business – at Aalto University(external link, opens in a new window)

Many industries have their own specific characteristics and challenges regarding sustainable business practices. In this section, you will find tips and links tailored to specific industries, including trade, tourism, construction, and manufacturing.

Experts in our network help entrepreneurs and companies in Espoo develop responsible and sustainable business practices. Feel free to get in touch.