About ESG
The ESG (standing for Environmental, Social and Governance) concept encompasses the criteria that establishes how an organisation manages its environmental impact, its social responsibility and the quality of its corporate governance. Adopting ESG practices means committing to a more ethical, transparent and sustainable business model, capable of generating long-term value for customers, investors and society. In a global context where sustainability is key, ESG is the common language that connects companies with opportunities, trust and being forward-looking.
The ESG approach allows the global performance of an organisation to be assessed in terms of sustainability. This approach has become an international standard to measure how companies manage their impact on the environment, their relationship with society and the quality of its corporate government practices.
- Environment (E): the focus is on climate change and cutting emissions, the efficient use of water, preserving biodiversity, optimising energy, reforesting initiatives, effective waste management, and adopting circular economy principles.
- Social (S): addresses aspects such as customer satisfaction, promoting gender equality and diversity, supporting vulnerable groups and social aid programmes, active contribution to the community, fostering lifelong learning, and respecting human rights.
- Governance (G): covers essential aspects of the corporate governance system, transparency and pay equity, cybersecurity, adopting responsible supply chains and implementing robust regulatory compliance systems.
Integrating ESG is not only a regulatory issue: it is a strategic opportunity to generate trust, attract investment and ensure competitiveness in ever more demanding markets. The European Union, for example, has bolstered its regulatory framework with directives such as the CSRD and the European Sustainability Reporting Standards (ESRS), that require transparency and rigour in the published information.
The Basque Government has launched the BasquESG initiative, a transformative project aimed at deploying a sustainability assessment and reporting system among SMEs in the Basque Country, as part of its commitment to making the most of strategic opportunities for the Basque business sector.
Sustainability assessment in industrial SMEs in the Basque Country: PILOT PROJECT
The objective of this pilot project is to apply the VSME standard developed by EFRAG, the European Financial Reporting Advisory Group of the European Commission. This standard is recommended by the European Commission to assess and report on sustainability in small and medium-sized enterprises (SMEs).This initiative is part of the BasquESG transformational project, aimed at analysing the applicability of this standard among Basque companies and thus continuing the development of the initiative.
Participation in the project is FREE OF CHARGE for the participating Basque companies.
Companies interested in registering for this new call may do so via the following form:
BasquESG Initiative
The BasquESG initiative, as one of the transformative projects of the Basque Industry Plan 2030, seeks to roll out a sustainability assessment system among the SMEs of the Basque Country.
Starting from the baseline of the work implemented and the legislative progress in the Basque Country and Europe, the aim is to set up a sustainability assessment system for Basque SMEs that meet the following key requirements:
- Affording positioning and competitiveness to the industrial SMEs of the Basque Country.
- Meeting the needs of the value chain
- Aligning with Europe
The rolling out of the initiative begins with the launching of this system via a pilot project, to test in advance the situation of Basque SMEs in that regard; the aim is for the other Basque industrial SMEs to be able to implement it during the second half of 2026.
As the cornerstone for driving the Basque economy, the Basque Industry Plan 2030 establishes – in keeping with the best industrial policy practices – a proactive approach to drive a set of Transformative Project to support the strategic priorities of the Plan.
Such projects are not mere sectoral actions or specific interventions. They are strategic levers aimed at triggering sustainable and structural transformations to the production fabric, in line with the strategic priorities and generating structural changes to the production system and to private-public partnership dynamics.
One of those transformative projects is the ESG Euskadi project, now renamed as the current BasquESG initiative.
Background and phases
In recent years, the European Commission has focused on establishing a unified and streamlined system to report on sustainable aspects aimed specifically at SMEs.
EFRAG, the European Financial Reporting Advisory Group, has thus developed the sustainability reporting tool known as VSME. This provides a simpler framework, while at the same time guaranteeing the filing of standardised sustainability reports.
After the recent recommendation by the European Commission for the use of this VSME sustainability reporting standard for small and medium-sized enterprises, the Basque Country is not only seeking to drive its use by Basque SMEs, but it is also encouraging trail-blazing companies, financial institutions and the public sector to use this standard when requesting or requiring this type of information.
Relationship between CSRD and VSME
The VSME is closely linked to the Corporate Sustainability Reporting Directive (EU) 2022/24643 (CSRD). While the CSD requires detailed ESG reports for large corporations using the European Sustainability Reporting Standards (ESRS), which often involve a double materiality analysis, the VSME offers a streamlined version for SMEs that are not listed on regulated markets. Both tools address the same sustainability issues that are established in the ESRS; however, the VSME does so in a proportionate manner and taking into account the fundamental characteristics of microcompanies and small and medium-sized enterprises. The following figure shows the main differences between those two sustainability reporting frameworks.
Phases of the BasquESG project
Governance
The BasquESG initiative seeks to be inclusive, where all the stakeholders that can contribute to the rolling out of sustainability reporting in companies are involved, to thus ensure the coherence and vision of all the parties.
This involvement is as per the following governance of the initiative.
Governance of the initiative
Awareness-raising · Capacity-building · Mentoring
Awareness-raising, capacity-building and mentoring actions will be run by Euskalit for companies throughout the deployment of the initiative.
- Awareness-raising
Awareness-raising actions seem to contextualise sustainability and ESG criteria as an opportunity to make industrial SMEs more competitive, along with explaining the European reference framework and the general running of the system.
These awareness-raising actions will consist of in-person and online sessions lasting around 2 hours.
The awareness-raising sessions in that regard can be found in the Ihobe agenda
- Capacity-building
Capacity-building actions seek to delve further into all the aspects addressed by ESG, so that the attendees have sufficient expertise to roll out this system in their organisations and thus be able to autonomously assess the global performance of their organisation in sustainability.
Different types of capacity-building actions will be run and will be included on the Ihobe agenda:
- Mentoring
The mentoring actions for the rolling out of ESG in Basque companies will consist of different types of action that allow the direct application of the available assessment systems, along with generating and possible verifying of the respective repots.
As these mentoring aspects are designed and made available to the companies, they will be passed on the ones that may be interested.
Sustainability assessment in industrial SMEs in the Basque Country: PILOT PROJECT
The objective of this pilot project is to apply the VSME standard developed by EFRAG, the European Financial Reporting Advisory Group of the European Commission. This standard is recommended by the European Commission to assess and report on sustainability in small and medium-sized enterprises (SMEs).This initiative is part of the BasquESG transformational project, aimed at analysing the applicability of this standard among Basque companies and thus continuing the development of the initiative.
Participation in the project is FREE OF CHARGE for the participating Basque companies.
Companies interested in registering for this new call may do so via the following form:
