Social sustainability and compliance in ESG reporting

In ESG reporting, environmental issues usually make the headlines, with the administrative side following as regulation advances. The social dimension—the famous “S”—often receives less attention, even though it is one of the cornerstones of sustainable business. For SMEs, this is often a missed opportunity, as well-managed social responsibility can be a significant competitive advantage and a way to stand out.

Social sustainability is, above all, about how a company treats its own employees and other people affected by its operations. It shows in employee well-being, workplace safety, and ensuring equal opportunities for development and career progression. It also extends beyond the company’s doors: supporting the local community, collaborating with regional stakeholders, and making responsible choices throughout the supply chain. Social responsibility is therefore not just “soft” sustainability. It involves concrete metrics and goals.

From a reporting perspective, the most important thing is to identify what is being measured and why. Aila’s VSME tool includes questions and indicators that allow SMEs to assess, for example, their employee well-being initiatives, diversity and equality within the workforce, occupational safety, and forms of community engagement. When this information is presented as part of an ESG report, it creates a balanced picture of the company’s responsibility.

Social sustainability reporting is not just an obligation. It strengthens the brand, makes the company a more attractive employer, and can even facilitate access to financing. Ultimately, it’s about how the company wants to be seen: merely as a producer of products or services, or as a holistically responsible player that cares about both the environment and people