Only one-fifth of SMEs in the UK know what Environmental, Social and Governance (ESG) is.

That’s according to a study by ID Crypt Global, which claims that out of these, only 12% are actually implementing ESG practices.

Different analysis by the same firm also claims that businesses that have started to work on ESG are seeing an average of 6.3% higher profit margins than those that aren’t.

Of those implementing ESG practices, 73% stated that it was improving their business.

Despite a positive response from companies engaging with ESG, 92% of those that are currently not revealed they had no interest in doing so in the future.

Lauren Wilson-Smith from ID Crypt Global said: “There remains a number of issues when it comes to ESG implementation for smaller businesses. The cost of obtaining and improving a score is certainly one factor, as well as a lack of prior knowledge on the subject.

“But there is also a lack of transparency due to the numerous score providers operating within the space. As it stands, ESG is inaccessible for many smaller businesses and more certainly needs to be done to drive home the benefits of ESG for companies of all sizes in all sectors.”