ECOPATH: Gamified ESG and circular economy training for SMEs
In line with the aim of the European Green Deal to decouple economic growth from resource use and move towards a green economy with zero net emissions by 2050 in a socially just transition, the European Union (EU) introduced the Corporate Sustainability Reporting Directive (CSRD) in 2022. Under this directive companies will gradually be required to regularly report on environmental, social and governance (ESG) activities. While there are many opportunities that emerge in the context of stricter reporting regulations and increase sustainability efforts, small and medium-sized enterprises (SMEs) in particular are likely to face challenges as well. To support SMEs in their preparations for CSRD reporting as well as in their efforts to improve their environmental impact, the EU co-funded project ECOPATH is developing a gamified training on ESG and circular economy.
What is the purpose of the CSRD?
The CSRD is intended to redirect capital flow towards sustainable investment and to contribute to sustainable and inclusive growth. It is furthermore targeted at managing financial risks that are rooted in climate change, resource depletion and environmental degradation as well as social issues while simultaneously increasing transparency and encouraging long-term thinking in financial and economic undertakings.
Under the CSRD companies are required to provide information on non-financial activities in relation to sustainability. The concept of ESG (environmental, social and governance) emerges here as a relevant framework as sustainability can be defined more comprehensively than its environmental dimension.
Notably, the CSRD covers the following sustainability aspects: Aspects of environmental sustainability include the company’s climate-related risks and their resilience, their plans to adapt to different climate scenarios as well as to the EU’s objective of climate neutrality by 2050, information on their greenhouse gas emissions and removal efforts, and information on energy use and efficiency. Social sustainability covers social factors such as working conditions, social partner involvement, collective bargaining, as well as equality, non-discrimination, diversity and inclusion. It further related to human rights matters such as forced labour or child labour in any part of the company’s value chain as well the company’s impact on people (including their employees), human health, and risks and trends with regard to employment and incomes. The last aspect – governance – relates to the role of the company’s administrative, management and supervisory bodies in sustainability matters, the expertise and skills needed to fulfil that role as well as internal control and risk management. Corporate culture, business ethics, anti-corruption and anti-bribery measures and information on political influence such as lobbying activities are equally covered.
When will SMEs be required to report under the CSRD?
The CSRD is being implemented gradually with large companies being the first ones that need to fulfil the new requirements and SMEs following at a later point as part of the second and third wave of implementation. Initially, SMEs were scheduled to begin reporting under the CSRD starting in the beginning of 2026 with the first reports due in 2027. In his plan, a transitional period of two years was included to allow SMEs to opt out of reporting under the condition that they justified not being able to provide the requested sustainability information.
However, in February 2025, the European Commission decided to simplify rules on sustainability reporting as well as to postpone their implementation with the intention to ease the burden on SMEs. According to the revised implementation plan, SMEs will have to begin reporting processes in early 2028 with the first reports due in 2029.
Even though, mandatory CSRD reporting is delayed, voluntary reporting is still possible based on the VSME framework – a voluntary sustainability reporting standard for SMEs. While such reporting may represent an added responsibility for many SMEs, there are several factors that suggest that SMEs should begin engaging in sustainability reporting activities already now.
How will the CSRD impact SMEs?
In his research, Ibrahim E. Sancak (Professor of Finance at Ostfalia University of Applied Sciences) predicts that the new reporting requirements will have a significant impact on business models, human resources, operations, financing capacities, clientele, and business cultures. While some companies are directly impacted by the CSRD, even those who do not have to report under this directive are likely to be affected, for instance, if they are part of the value chain of a company subjected to CSRD requirements. These companies might opt to include in their value chains SMEs that are able to provide relevant sustainability information giving an advantage to those companies that already make use of VSME reporting or are preparing for CSRD reporting.
Similarly, non-EU organisations such as the Global Reporting Initiative (GRI) are supporting the development of EU sustainability reporting. It is therefore possible that more international reporting regulations that are harmonised with the CSRD may emerge. To be prepared for CSRD reporting as well as other potential reporting requirements, it is advisable to begin preparations as early as possible. Referring to a study by the University of Cambridge Institute for Sustainability Leadership from 2020, Sancak highlights that it might take sustainability pioneers of the early 2020s until 2030 to be well on the way of implementing the twin transformation of green and digital transitions which are essential in the context of the EU Green Deal’s goals and CSRD reporting.
Aside from the importance of being prepared for upcoming reporting requirements and sustainability transitions, several other factors indicate advantages of both voluntary and mandatory reporting.
Environmental and climate-related risks are considered to be the severest risks for companies in the next decades. Reporting may help companies to assess their sustainability performance and increase their resilience to these risks while at the same time mitigating them through more sustainable business models, strategies, and activities. Moreover, proactive and transparent sustainability reporting can help companies to optimise internal processes leading to competitive advantages and cost savings as Dominika P. Gałkiewicz and Veronika Gaßner (University of Applied Sciences Kufstein Tirol) highlight. Good sustainability impacts that result from these activities may, in addition, attract business partners and customers, and make financing opportunities such as sustainability-linked loans and green bonds more accessible.
Education Pathways for Circular Economy and ESG Upskilling
While sustainability reporting and efforts to increase sustainability impacts and move towards circularity, offer many advantages and opportunities to SMEs, it is undeniable that there also are challenges on the way, i.e., due to limited resources and compliance costs. With regard to CSRD reporting, the absence of SME-specific guidelines, difficulties in data collection, and the complexity of regulatory requirements present particular hurdles.
Accounting for 99% of all businesses in the EU, SMEs are the backbone of the European economy. They also play a vital role in sustainability transitions as innovative solutions for sustainability are often developed and spread by SMEs. Therefore, the consortium of the EU co-funded ECOPATH project considers it to be essential support SME professionals in their sustainability journeys and reporting activities, and to equip educators with the tools to transfer relevant knowledge and skills.
As part of the project, the partner organisation from Sweden, Ireland, Germany, Croatia, and Spain have since November 2024 conducted a series of activities to assess SME professionals’ and adult learners’ expectations for a training on ESG and circular economy. Those who participated in the consortium’s open house events, interviews, and workshops, reported a need to build knowledge on concepts of sustainability, ESG and circular economy, their intersections, benefits, and importance. They have equally highlighted a need for an overview of relevant regulations and reporting criteria for SMEs, the development of scalable actionable real-life solutions, and guidance on how to start reporting on sustainability as well as how to implement sustainable practices and business strategies. Lastly, communication emerged as a relevant aspect, both in regard to discussions and decision-making on sustainability within companies, and on how to communicate the company’s sustainability journey to clients, customers and other stakeholders while avoiding greenwashing.
To address these aspects, the ECOPATH consortium is currently developing a curriculum which will form the basis of a Gamebook on ESG and circular economy for SMEs. The Gamebook makes use of gamified learning approaches to provide SME professionals with knowledge on sustainability – especially ESG and circular economy, guidance on reporting and adopting sustainable practices, an introduction to sustainable business models, and to support them in navigating reporting regulations and requirements. The project will furthermore equip educators with a Gamebook Facilitation Guide to support their use of the learning materials.
On July 9, 2025 at 10 am GMT/ 11 am CET, the curriculum will be presented to all those interested during an international webinar. On this occasion, the project partners will also collect feedback on the curriculum to ensure that the Gamebook meets the intended users’ needs and expectations. To receive a link to join the webinar, sign up here or email [email protected].
About ECOPATH
The ECOPATH project highlights the potential of Circular Economy in supporting companies to implement Environment, Social and Governance (ESG) principles. It equips staff members of SMEs with the knowledge and skills to improve their companies’ environmental impact through circular approaches and prepares educators and trainers to transfer relevant green skills and knowledge on Circular Economy and ESG to adult learners through the development of a Circular Economy ESG Gamebook training.
The project consortium unites organisations from Sweden (SwIdeas; CirEko), Germany (AFBB Akademie für berufliche Bildung), Croatia (SIMORA – Sisak Moslavina County Development Agency), Spain (BIOAZUL), and Ireland (Dublin Chamber of Commerce).
If you’re interested and would like to learn more about the ECOPATH project, please visit our website.
About the author
Merle Emrich is an analyst and programme officer at SwIdeas AB (Sweden), partner organization in the Education Pathways for Circular Economy and ESG (Environment, Social, and Governance) Upskilling (ECOPATH) project.
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Disclaimer
ECOPATH seeks to build pathways for European enterprises to become more sustainable. It equips current and future SME professionals with green skills and knowledge on circular economy and ESG. The project is co-funded by the Erasmus+ programme of the European Union. (Project number: 2024-1-SE01-KA220-ADU-000244589)
Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Education and Culture Executive Agency (EACEA). Neither the European Union nor EACEA can be held responsible for them.
