As the UK Government prepares to launch a 12-week consultation on new Sustainability Reporting Standards, the latest poll from YouGov has revealed a sharp divide among UK businesses in their awareness and readiness for upcoming changes to ESG regulations.

According to a survey of 520 business decision-makers, many businesses are still in the dark over the proposed changes to sustainability rules, with just 41% of small businesses and only 19% of micro-businesses aware of the government’s plans.

That’s compared to 71% of large businesses and 67% of medium-sized businesses, evidence of a worrying gap in awareness that could create compliance risks, especially for smaller firms that YouGov said might struggle to keep up with incoming requirements without early preparation. 

Unsurprisingly, large and medium-sized businesses are so far the most prepared, with 72% and 68% respectively reporting they are ready to comply, a stark contrast to the 46% of small businesses and 28% of micro-businesses that feel as prepared.

While a lack of awareness may be a key factor for those firms unprepared for new ESG rules, YouGov argue that the limited resources available to smaller firms also likely plays a role, with ESG compliance often requiring dedicated personnel and expertise.

YouGov’s figures also indicate that smaller firms may be feeling left behind in the tumult surrounding ESG transition, with just 35% of small businesses and 25% of micro-businesses believing the government is doing enough to regulate ESG and hold businesses accountable.

However, although 52% of larger firms and 56% of medium-sized businesses think the government is so far on track with its ESG approach, these figures are low enough across the board to suggest that more could be done through better engagement with the business community.

For their part, businesses are clear on what kind of support they need. YouGov found tax incentives and credits to be the most sought-after (43%-55% across different business sizes), along with grants and funding opportunities.

For larger firms, clearer regulatory guidelines to help them with the adoption of new ESG practices were favoured by most (54%), while small and micro-businesses were more interested in financial support (both 43%). 

Overall, although large and medium-sized companies appear to be on track, YouGov’s data suggests that more government communication may be needed to ensure smaller businesses don’t get caught out by new ESG rules.

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Earlier this year, a report from insightsoftware found that the overwhelming majority of UK and EU businesses (92%) are worried that their current approach won’t meet compliance requirements around upcoming ESG legislation such as the Corporate Sustainability Reporting Directive (CSRD), coming into effect later this year.

That report also found that most firms are turning to new tech to help navigate the complex ESG landscape, with over half (58%) already exploring new technology to enhance their capabilities, and 95% admitting that data collection is the biggest hurdle to ESG compliance.