Empowering SMEs: Your Input Matters in Crafting Sustainable Reporting Standards
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Public consultations on mandatory and voluntary non-financial reporting standards (ESRS) for small and medium-sized enterprises were launched on 22 January 2024. The consultations cover two draft Sustainability Reporting Standards (ESRS) for small and medium-sized enterprises.
The first project (the so-called ESRS LSME) is intended for small and medium-sized enterprises that are listed public interest entities within the meaning of the NFRD Directive and – in case of Poland - the Accounting Act as of 29 September 1994 and that will be required to report on sustainable development in accordance with the CSRD Directive for the first time in 2027 for the year 2026 (the data to be disclosed is for the period from 1 January 2026 to 31 December 2026).
These include entities whose transferable securities (bonds, shares and other securities) are admitted to trading on a regulated market in the European Union, small and non-complex institutions (SNCIs) and captive insurers and reinsurers. The ESRS LSME will be adopted by delegated act and will apply from 1 January 2026 with an additional two-year opt-out period. The purpose of the LSME ESRS is to establish reporting requirements that are proportionate and appropriate to the size and complexity of the business and the capabilities and characteristics of the LSME. This is expected to improve access to finance for LSMEs and avoid discrimination by financial market participants through the availability of standardised sustainability information. The LSME ESRS is a standard consisting of three broad sections: "1. General Requirements", "2. General Disclosures" and "3. Policies, Actions and Objectives" and three sections dedicated to metrics: "4. Environmental", "5. Social" and "6. Business Operations".
The second project, known as VSME, is aimed at micro, small and medium-sized enterprises that are not subject to the reporting requirements of the CSRD Directive. It is therefore a voluntary standard. Its aim is to help SMEs prepare for questions on ESG issues that will be asked of them in the supply or value chain, including by companies subject to reporting requirements. The VSME ESRS consists of a core module and two additional optional modules: a narrative policy, actions and targets (PAT) module and a business partner module.
Consultations on the LSME and VSME ESRS projects will continue until 21 May 2024.
Read the consultation on LSME ESRS here
Read the consultation on VSME ESRS here
LSME ESRS:
- Exposure Draft ESRS LSME
- Exposure Draft ESRS LSME - Basis for Conclusions
- Exposure Draft ESRS LSME Addendum to the Basis for Conclusions
- LSME ED - Consultation online questionnaire
- LSME ED – Consultation questionnaire in PDF
