The LkSG a curse or a blessing?
What do you think of the Supply Chain Due Diligence Act - LkSG for short? Or ESG reporting in accordance with CSRD as implementation of the Green Deal adopted by the EU in 2019? About the extreme documentation obligations imposed on companies by these laws - and which, as I know from many conversations, are particularly difficult for SMEs?
Two events on the topic of sustainability have made me reflect on my stance on EU regulations such as these in particular, but above all on my stance on the role of SMEs in our political and social landscape: It was an event in Freiburg when I met Franziska Brantner, State Secretary to the Federal Minister for Economic Affairs and Climate Protection, a year ago and now, at the beginning of June 2024, at the same location - as a kind of déjà vu - with Andreas Schwab, lead candidate of the CDU Südbaden for the 2024 European elections and already a Member of the European Parliament since 2004.
What conclusion have I come to? Well, the law is not the problem, or rather it is just a symptom. Once again, things are more complicated - and not simply black or white. And they are also partly home-made.
The SME sector is lagging behind - it could have been that simple
I found what Ms. Brantner said about the background to the LkSG very informative: because the original concept of the law, as she presented it, was very simple. No complicated documentation requirements with a high proportion of procurement in Europe.
For a medium-sized company such as allsafe, which sources a high percentage of the materials required for production from Germany or Europe, this would mean that the documentation obligation due to overfulfillment of the conditions would no longer apply.
That alone would have been proof enough. So it all started with such a simple idea? But what happened next?
The mills of lobbying grind down the capacities of SMEs
Well, then the Berlin lobby mill, financed by the corporations and large companies, started to grind... "Please don't be so strict, the fine is not too high, our companies would rather write one more thick report!" - and the simple idea became more and more complicated. Now you have your extensive documentation obligations. For a medium-sized company, this is a real problem because it may only have 100 employees and now has to assign one or more people to take care of the reports. For a company with several thousand employees, 5 or 6 people dealing with this is hardly significant.
My déjà vu here: at the meeting a year later, we talk about the same experience, only this time on the subject of ESG reporting/CSRD. Here, too, we did not manage to exert enough influence in advance to prevent companies from being hindered by bureaucracy.
Attention in the information, news and interest hype
My second topic I would like to report on is the aforementioned meeting with Dr. Andreas Schwab a few weeks ago. That evening was less about a specific topic and more about the wealth of issues that need to be introduced, coordinated and harmonized at EU level. To summarize: We have no knowledge problem!
Democracy also needs leadership, i.e. to clarify the question of orientation and "Where to?", to give direction and then to set the appropriate framework.
SMEs make their voice heard - through networking
I see SMEs as the backbone of our economy, family businesses that often operate quietly but have an enormous impact on society. It takes courage, creativity and cohesion to strengthen this impact and overcome bureaucratic hurdles. This is where networking comes in, strengthening SMEs and promoting their issues. One platform that pursues this goal is our event Mind Map Mittelstand. This format offers SMEs space to make their concerns visible and address them. At our last event in June, the focus was on future skills such as managing diverse teams, the circular economy, digitalization, organization & culture, change & transformation and energy supply. We have summarized the highlights in a video in a video.
By pooling this knowledge and networking entrepreneurs and decision-makers, synergies are created that have an impact far beyond the day of the event. In this way, competencies are linked and a radiance is created that makes bureaucratic limitations fade into the background.
In addition to complicated requirements that tie up capacities, we are facing much more far-reaching challenges that can be solved through cooperation, among other things. One key issue that is currently preoccupying us is "security". This term has taken on a new relevance in business, politics and society and affects people on an existential level. At the same time, we at allsafe are confronted with the topic of "transformation".
Networks are essential in order to achieve the diversity and multicompetence required for transformations. Medium-sized companies in particular cannot draw the necessary resources from their size alone. Ecosystems consisting of companies, science and politics are therefore indispensable.
Our task is therefore to clarify the "Where to?", to provide orientation and to work together wherever possible.
Rattling is part of the trade
My insight from this look into the back rooms: Rattling is part of the trade! And we SMEs don't rattle enough. We don't make enough noise to make ourselves heard against the big players. I believe that SMEs are too cautious - and I mean this as a home-made problem.
I think that networking and cohesion is a good opportunity for us from the SME sector to change less sensible things and get sensible things off the ground. To set a dynamic in motion together that is good for the future. For the future of SMEs and, above all, for the future of the people in our society.
