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“Supporting SMEs to embed ESG into their operational DNA isn’t a nice-to-have — it’s how we unlock cumulative impact far beyond individual businesses.”
Small and medium-sized enterprises (SMEs) are far more than just the “little guys” in the economy: their cumulative impact is enormous. They represent a foundational pillar for sustainable development. Yet, when ESG support for SMEs is superficial — delivered through copy-paste documentation or audits compromised by conflicts of interest — we risk institutionalizing greenwashing rather than transformation.
Many SMEs, including small hotels, often perceive ESG certification as a burden, especially when handed ready-made documentation and facing auditor-consultant conflicts. This is why proper training and embedding ESG into operations is critical.
This article explores:
The scale and importance of SMEs, including small hotels, in global and local economies
The problem with weak ESG consultancy that doesn’t embed into operations
The conflict of interest risk when the same firms provide consulting and certification/audit
Why training and culture shift, not just documentation, are essential for real sustainability
The Türkiye Context: TGA Criteria, Prohibited Consultancy Roles for Auditors, and Emerging Integrity Risks in Practice
1️⃣ The Power of SMEs — and Small Hotels: Why Their ESG Journey Matters
1️⃣ The Power of SMEs — and Small Hotels: Why Their ESG Journey Matters
SMEs are not a niche category; they are everywhere, and they matter deeply. Among them, small hotels are particularly illustrative: although individually modest, they collectively influence energy, water, waste, and labor practices across the hospitality sector.
SMEs make up around 99% of all firms in many economies and contribute 50–60% of value added. SMEs account for 60–75% of employment in manufacturing and services. Small hotels directly employ dozens to hundreds of staff, multiplying their social and environmental footprint. Globally, SMEs — including small hotels — support the livelihoods of over two billion people.
2️⃣ The Problem: Superficial ESG Advice That Doesn’t Stick
2️⃣ The Problem: Superficial ESG Advice That Doesn’t Stick
Too often, consultancies deliver canned ESG documentation — standard policies, checklists, reports — without actually embedding sustainability into daily operations. Small hotels, for instance, may receive pre-filled templates that don’t reflect their unique operational realities.
Why SMEs See Certification as a Burden
Lack of operational integration
No real behavioral change
Certification prioritized over transformation
Providing ready-made documentation is not sufficient. Real ESG integration requires training, coaching, and capacity-building — especially for SMEs and small hotels that may feel overwhelmed by the process
3️⃣ The Auditor-Consultant Conflict: A Paradox at the Heart of Green Certification
3️⃣ The Auditor-Consultant Conflict: A Paradox at the Heart of Green Certification
A growing issue is the erosion of independence in ESG certification.
When certification bodies informally recommend specific consultants — and facilities feel pressured to work with them — a perceived or actual conflict of interest emerges. This can result in intimidation, excessively strict interpretations, or punitive attitudes toward facilities that do not use the “recommended” consultant.
Conflict of interest reduces audit quality (Silveira & van Bellen, 2020)
Ambiguity in ESG assurance undermines credibility (Durham Thesis, 2021)
Operational impact is overshadowed by superficial compliance
“When consultants and auditors work together for the same SME, green certification can unintentionally fuel greenwashing rather than genuine transformation.”
Türkiye Context: A Real-World Example of the Conflict Paradox:
The Türkiye Sustainable Tourism Program (TGA) clearly defines independence boundaries;
TGA explicitly require auditors to declare that they will not engage in consultancy, advisory, or similar activities outside their audit role. (Source: TGA Sustainable Tourism Program Auditor Criteria – tga.gov.tr)
This is intended to protect audit impartiality and ensure credibility.
Structural Integrity Risks Emerging in Practice:
In practice, some audit firms are informally associated with specific consultants, creating an environment where hotels feel implicitly pressured to work with those consultants to avoid friction or perceived disadvantage during audits. This undermines the impartiality expected from an independent assurance process.
Facilities that choose to work with independent consultants have experienced overly strict interpretations, unconstructive communication, or a less supportive audit atmosphere. These dynamics raise questions about whether impartiality and professional judgment are being applied consistently across the sector.
When consultancy–audit boundaries become blurred, hotels may fall into a cycle of “template documentation + expedited auditing,” preventing genuine operational transformation.
Therefore, although the TGA’s official prohibition on consultancy by auditors is correct and necessary, incomplete alignment in practice can unintentionally create an ecosystem where procedural compliance overrides genuine sustainability — an algorithmic greenwashing loop
4️⃣ The Solution: Training + Culture, Not Just Documents
4️⃣ The Solution: Training + Culture, Not Just Documents
Real transformation comes from embedding ESG into daily operations.
1. Invest in Training
All staff must understand ESG principles and their practical role.
Internal auditors and sustainability champions should be trained (MDPI, 2024).
ESG should be linked to KPIs and performance systems.
2. Ensure Independent Assurance
Consulting and auditing must remain separate.
Audits should emphasize operational effectiveness over documentation volume.
Audit durations must not be shortened. It has been observed that in many well-known accredited audit firms, the audit date on the audit reports do not match the actual on-site audit duration.
3. Build a Sustainability Culture
Review meetings, involvement mechanisms, peer learning.
Track real metrics: energy, water, waste, employee well-being.
Training and culture shift are what transform ESG from a perceived burden into an operational advantage.
5️⃣ Why This Matters: Avoiding Greenwashing and Building Trust
5️⃣ Why This Matters: Avoiding Greenwashing and Building Trust
Superficial ESG efforts risk greenwashing
Conflicted assurance reduces credibility
Independent audits + operational embedding = real and measurable impact
SMEs and small hotels have tremendous cumulative influence
SMEs, including small hotels, are central to sustainability. Superficial support, template documentation, and conflicted audit ecosystems turn ESG into a “green badge” exercise.
The solution:
Embed ESG into daily operations through training and culture
Separate consulting from auditing
Measure real-world impact, not just compliance
“When ESG is embedded deeply into the DNA of SMEs, their cumulative power drives systemic change — transforming burden into opportunity.”
For support in setting up sustainability framework for your properties or for training needs, please contact us at info@tscconsulting.co.
References
Bezerra, R. R. R., Silva, M. A., & van Bellen, H. M. (2024). Validation of challenges for implementing ESG practices in organizations. MDPI.
Bureau Veritas. (2023). Submission to the Australian Treasury – Sustainability assurance consultation. Australian Treasury.
Carijournals. (2023). Assessing the role of assurance in mitigating greenwashing. Journal of Business & Strategic Management.
Cederholm, C. (2022). Auditors’ path toward building their comfort in sustainability reporting [Master’s thesis, Uppsala University]. DiVA Portal.
Durham University. (2021). Mitigating greenwashing: The role of ESG assurance (Doctoral thesis). Durham e-Theses.
McKinsey Global Institute. (2023). A microscope on small businesses: Spotting opportunities to boost productivity. McKinsey & Company.
Nygaard, A. (2023). Is sustainable certification’s ability to combat greenwashing trustworthy? Frontiers in Sustainability.
OECD. (2019). SMEs: Key drivers of green and inclusive growth. OECD iLibrary.
Research & Scientific Innovation Society. (2023a). The impact of ESG disclosure on corporate performance. International Journal of Research and Innovation in Social Science, 9(8), 1388–1396.
Research & Scientific Innovation Society. (2023b). Corporate governance, assurance, and greenwashing dynamics. International Journal of Research and Innovation in Social Science, 9(14), 2369–2396.
Silveira, R. L. F., & van Bellen, H. M. (2020). Joint provision of audit and non-audit services and effect on assurance quality. Revista Contabilidade & Finanças. Portal de Revistas da USP.
Sustainability Directory. (2022). How does the ‘consulting vs. auditing’ conflict of interest manifest in certification? Sustainability Directory.
Virtus Interpress. (2024). Audit independence and sustainability assurance: Emerging conflicts and risks. Journal of Governance and Regulation, 14(1).
World Economic Forum. (2023). How small businesses can power a sustainable and inclusive world.
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