• Small and Medium-Sized Enterprises (SMEs) risk market exclusion due to their limited capacity to meet the data demands imposed by the CSRD and ESRS—unless they receive active support from multinational companies. This key conclusion emerged from CSR Europe's latest EU Masterclass on LSME ESRS.

• Join the next session on key players driving the EU sustainability agenda in the new Commission.

The Corporate Sustainability Reporting Directive (CSRD) is set to transform non-financial reporting requirements across the European Union, impacting businesses of all sizes. At the third session of the EU Masterclass series, Opportunities for B2B Collaboration in the CSRD & ESRS, speakers addressed the forthcoming reporting obligations for Small and Medium-Sized Enterprises (SMEs), with a particular focus on the Draft Standards for SMEs. Both the Voluntary Standards for SMEs (VSMEs) and the Listed SMEs standards (LSMEs) under the CSRD are designed to be proportionate to the size and complexity of companies, while also promoting better access to finance and facilitating streamlined access to sustainability data from larger business partners.

However, as reporting deadlines approach, large companies will need to proactively engage smaller stakeholders in their value chain to help them prepare for compliance. Without such engagement, larger businesses risk being unable to collect and communicate crucial sustainability data from SMEs, potentially leading to their exclusion from the supply chain. Participants in the session recommended several supportive measures to facilitate SME compliance, including training sessions; materiality assessments; policy reviews; development of internal control systems; testing ESG data collection platforms. In essence, clear reporting guidelines, digital tools, and accessible information will be crucial to address SME’s implementation challenges and capitalize on the opportunities presented by the CSRD: advancing the competitiveness of European businesses by fostering more transparent and sustainable practices.

Finally, as the CSRD mandates comprehensive corporate reporting on areas such as business model, governance, metrics, and targets, with an emphasis on material topics, it is crucial for national governments speed up the transposition of the directive to avoid legal uncertainty for businesses across EU member states.

What comes next?

CSR Europe’s EU Masterclass series will end on 11 December with the online session “Decoding the New European Commission 2024-2024”, dedicated to the key actors of the new European Commission. Members can register for free while non-members can purchase the ticket here.

For more information:

Morris Massarutto,

Project Manager