While large-size companies and listed companies must disclose information on their Corporate sustainability through reporting, following the CSRD European directive, SMEs are not obliged to report their sustainability impact (yet). However, they are encouraged to do so. How?
EFRAG is a EU level organisation in charge of providing technical advice to the European Commission for the draft of European Standard. This organisation is currently working on a standard for sustainability reporting addressed to SMEs. Their current work propose already guidance on voluntary reporting, available from their website: the so called “Voluntary ESRS for non-listed Small- and medium- sized enterprised (VSME ESRS)”
This document sets the principles for the preparation of the sustainability report, proposing 3 different modules: the basic module, the narrative -PAT, and the Business partners. While the basic module is made of 13 different disclosures, this part can be completed by a Narrative-PAT module (with identification of relevant sustainability matters – 5 disclosures), by a Business partners module (information on business partners, investors and lenders – 11 disclosures), or by both.
This distribution helps the SME in selecting the modules and disclosures that are relevant to each case. This standard is still under construction, and has not been fully adopted yet, however, we can anticipate that the final document will still be quite close to the information contained here. Thus, this document offers a valuable information on what elements the SMEs should have in mind for evaluating their sustainability performance.