Policy recommendations to encourage the adoption of ESG measurement tools among SMEs & startups

Policy recommendations from the Green at Heart (GaH) project supported over 180 European SMEs in adopting ESG measurement tools. Led by Impact Hubs Amsterdam, Madrid, and Vienna, the initiative showed that with simple tools, local coaching, and micro-grants, small businesses can successfully integrate sustainability into their operations.

Impact Hub Network

Global team

In recent years, environmental, social, and governance (ESG) criteria have gone from being a niche interest to a central pillar in shaping the future of business. Yet, for startups and small enterprises, particularly in the social economy, ESG integration often feels like an uphill battle. Complex reporting frameworks, resource constraints, and rapidly evolving regulatory landscapes pose real barriers.

The European Green at Heart (GaH) initiative, led by the Impact Hub Amsterdam, Madrid and VIenna with the support of Impact Hub Network and the municipalities of Amsterdam and Vienna, set out to bridge this gap. Its mission? To demonstrate that startups and social SMEs can not only be part of the green transition — but leaders in it, provided they are equipped with the right tools, training, and financial incentives.

This article outlines policy recommendations to encourage the uptake of ESG measurement tools among SMEs and reflects on broader learnings from the Green at Heart programme, which engaged over 180 enterprises across Europe. Read more about the project and process in our previous articles.

Key policy recommendations

Position ESG as a value driver

ESG should be seen as a source of competitiveness, innovation, and resilience — not just compliance. GaH showed SMEs improved sustainability scores by 34% when supported with practical guidance.

Green at Heart showed me that even the smallest company can be part of the sustainability movement. It’s about starting where you are… and discovering what fits your business.

Kersti Evelina Lundqvist, The Good Tribe (Austria)

Provide SME-friendly tools

Most ESG frameworks are built for large companies. SMEs need simple, actionable, and localised tools. Funding for open-access toolkits and co-designed solutions is essential.

The tools are easy to understand, applicable to small business realities, and make ESG feel doable rather than overwhelming.

Participant feedback, Impact Hub Amsterdam

Build local support ecosystems

Digital tools alone aren’t enough. Peer learning, coaching, and municipal support accelerated uptake in GaH. Local hubs and municipalities should act as multipliers of ESG knowledge.

We see ESG as a way to make sustainability more tangible and embed it more integrally in society… Supporting SMEs is essential, since they often lack the resources to handle regulatory pressure and market demands on their own.

Linea Bingel, City of Amsterdam

Offer micro-grants and financial incentives

Even small grants (e.g., €8,000 in GaH) enabled SMEs to implement energy-saving and circular solutions. Policies should include micro-grant schemes, tax credits, and results-based financing.

Ensure visibility and coordination

SMEs need clarity, not scattered resources. National and EU-level one-stop platforms should integrate tools, funding, and training.

Balance regulation with SME realities

SMEs face increasing ESG reporting demands under the CSRD. Proportionate templates, onboarding pathways, and ongoing monitoring are vital.

Some sections of current ESG tools reflect regulations that are not tailored to the realities of SMEs. Without support, they may be impossible to complete.

Green at Heart Policy Paper

Broader learnings from Green at Heart

The GaH initiative demonstrated that transformation is possible — even for the smallest enterprises. When SMEs received the right combination of tools, training, peer exchange, and micro-funding, the sustainability needle moved — both in terms of mindset and action.

ESG is a journey, not a checklist. What matters is starting, iterating, and learning.
Peer exchange reduces fear. Seeing other small companies succeed inspires action.
Impact is not defined by team size, but by intention. SMEs can lead.

From Amsterdam’s role as an ESG testbed to Vienna and Madrid’s policy dialogues, GaH proved that cities, innovation hubs, and public institutions can work together at national level and across Europe, to support business transformation at scale.

Green at Heart helped us transform ESG from a reporting exercise into a source of strategic insight. It enables us to act with clarity and confidence.”

Tom de Pele, Kacau (Portugal)

SMEs and startups will play a crucial role in the green transition. But they cannot be expected to navigate this journey alone. If Europe is serious about embedding ESG into its entrepreneurial fabric, it must meet SMEs where they are — and provide the infrastructure, incentives, and inspiration to help them move forward.

The Green at Heart project has shown the way. It’s now time to scale its insights into policy, funding programmes, and ecosystem design.

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