Voluntary Sustainability Reporting Standards for SMEs
The EU has released recommendations for voluntary sustainability reporting standards for SMEs, aimed at helping them disclose sustainability information based on the Corporate Sustainability Reporting Directive.
The EU will release a proposal in the first quarter of 2025 to simplify sustainability disclosure requirements, allowing companies with less than 1000 employees to apply voluntary sustainability reporting standards.
Related Post: EFRAG Releases Voluntary Sustainability Reporting Standards for Non-listed SMEs
Introduction to Voluntary Sustainability Reporting Standards for SMEs
The voluntary sustainability reporting standards for SMEs were developed by the European Financial Reporting Advisory Group in December 2024. This standard was developed with reference to the European Sustainability Reporting Standards (ESRS). The EU will continue to revise the European sustainability reporting standards in its simplification proposal, so the reporting standards for small and medium-sized enterprises may change in the future.
The EU recommends that large enterprises and financial institutions make requirements based on this standard when seeking sustainable information from small and medium-sized enterprises. The EU recommends that small and medium-sized enterprises identify and manage their sustainable development performance based on this standard, improve their access to sustainable financing, and enhance their competitiveness. Small and medium-sized enterprises can obtain relevant guidance on the website of the European Financial Reporting Advisory Group.
The goal of the voluntary sustainability reporting standards for SMEs is to assist unlisted small and medium-sized enterprises in:
- Provide information that helps meet the sustainable information needs of large enterprises seeking from their suppliers.
- Provide information that helps meet the data needs of banks and investors and assist businesses in obtaining financing.
- Improve corporate sustainability, enhance competitiveness, and strengthen resilience.
Although unlisted small and medium-sized enterprises are not within the scope of the Corporate Sustainability Reporting Directive (CSRD), this standard can still be applied. This standard considers the characteristics of small and medium-sized enterprises and is consistent with the sustainability reporting standards for large enterprises. The standard is divided into two parts:
- Basic Module: The information that enterprises must disclose when choosing to apply this standard, including basic information and sustainable practices, policies and future actions, as well as indicators such as energy, greenhouse gas emissions, water resources, biodiversity, labor force, etc.
- Comprehensive Module: Other information that financial report users may need in addition to basic modules, such as strategic models, transformation plans, governance information, etc.
Reference:
EU Voluntary Sustainability Reporting Standard for SMEs
Contact：todayesg@gmail.com
