A Short Guidance for SME Sustainability Reporting at the EU Level

Dominika P. Gałkiewicz – University of Applied Sciences Kufstein Tirol, Finance, Accounting & Auditing, Andreas Hofer-Str. 7, 6330 Kufstein, Austria

Veronika Gaßner – University of Applied Sciences Kufstein Tirol, Finance, Accounting & Auditing, Andreas Hofer-Str. 7, 6330 Kufstein, Austria

Abstract: Environment, Social and Governance (ESG) related regulations such as the Non-Financial Reporting Directive (NFRD) or the upcoming Tax­onomy Regulation of the European Union (EU) combined with the Corporate Sustainability Reporting Directive (CSRD) had and will have a lasting impact on various market participants including small and medium-sized enterpris­es (SMEs). Among these market participants, SMEs face difficulties in comply­ing with sustainability reporting due to limited resources and the absence of SME-specific guidelines. To address this issue, a framework for SME sustain­ability reporting in the EU is proposed in this study. The framework consists of a seven-step process that helps companies and stakeholders prioritize rele­vant sustainability topics. The proposed framework is easy to implement and cost-effective, considering the unique characteristics and capabilities of SMEs. The study targets managing directors and decision-makers of German SMEs to assist them in preparing their sustainability reports. The minimum content elements for SME sustainability reporting include general disclosures, climate change, own workforce, and materiality assessment. The European Financial Reporting Advisory Group (EFRAG) plans to provide a digital questionnaire for SMEs to gather the necessary information. Proactive sustainability reporting can help SMEs improve stakeholder relations and optimize their internal pro­cesses, leading to competitive advantages and cost savings. However, it is im­portant to note that authenticity, high quality, and transparency in disclos­ing sustainability aspects are crucial to avoid reputational damage resulting from greenwashing.

7th International Scientific Conference on Recent Advances in Information Technology, Tourism, Economics, Management and Agriculture – ITEMA 2023 – Conference Proceedings, Hybrid (Faculty of Organization and Informatics Varaždin, University of Zagreb, Croatia), October 26, 2023

ITEMA Conference Proceedings published by: Association of Economists and Managers of the Balkans – Belgrade, Serbia

ITEMA conference partners: Faculty of Economics and Business, University of Maribor, Slovenia; Faculty of Organization and Informatics, University of Zagreb, Varaždin; Faculty of Geography, University of Belgrade, Serbia; Institute of Marketing, Poznan University of Economics and Business, Poland; Faculty of Agriculture, Banat’s University of Agricultural Sciences and Veterinary Medicine ”King Michael I of Romania”, Romania

ITEMA Conference 2023 Conference Proceedings: ISBN 978-86-80194-75-2, ISSN 2683-5991, DOI: https://doi.org/10.31410/ITEMA.2023

Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-Non-Commercial 4.0 License (https://creativecommons.org/licenses/by-nc/4.0/) which permits non-commercial use, reproduction and distribution of the work without further permission.

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