The draft of sustainability standards must be reviewed to reduce negative effects on SMEs in the supply chain

The draft standards for large enterprises developed by EFRAG (the European financial reporting advisory group) under the Corporate Sustainability Reporting Directive must be reviewed to reduce negative effects on SMEs in the supply chain. This was the main message from Enterprise director Luc Hendrickx at the Spanish outreach event organised by EFRAG and CGE, the Spanish member of our member organisation EFAA.

The trilogue agreement reached on 23 June supports SMEunited’s view that standards should also take account the difficulties businesses may face in gathering information from actors throughout their value chain, especially those who are not obliged to report sustainability information. The actual drafts certainly do not meet this requirement, Mr Hendrickx stressed.

He reminded the audience of SMEunited’s position that voluntary sustainability reporting has advantages for SMEs: e.g. employer branding, increased competitiveness, an opportunity to be a supplier to big enterprises and participate in public procurement. However, as with financial reporting, non-financial reporting should primarily be a management tool for the entrepreneur itself. But this objective is completely lacking in the actual drafts, as they are conceived solely to satisfy the so-called information needs of large companies, investors, academics and NGOs.

The actual proposal of the European Sustainability Reporting Directive has nothing to do with improving the green transition. SMEunited estimates the cost for SMEs between 10 and 200 billion euros just to meet reporting requirements.

Sources of Information.

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