The EU’s Corporate Sustainability Reporting Directive (CSRD) is set to roll out in phases, with its scope expanding to encompass more companies as the law comes fully into force. Starting in 2026, listed Small and Medium Sized Enterprises (SMEs) in the EU must report under the CSRD. Additionally, some unlisted SMEs may want to report under the CSRD voluntarily. SMEs won’t be held to the same reporting standards as large companies, and EFRAG is working on SME-specific standards. EFRAG published new exposure drafts for both voluntary and mandatory SME standards. EFRAG’s press release on the publications states that:
“EFRAG is pleased to announce its public consultation on the two Exposure Drafts on sustainability reporting standards for SMEs. The consultation period will run until 21 May 2024, and EFRAG invites all stakeholders to provide comments through the online consultation questionnaires. Interested parties are also invited to participate in the field test that will be run in parallel to the public consultation. The call for participation in the field test was released on 20 December 2023 with the deadline to submit interest set to 31 January 2024. Instructions for the field test are now published.”
The expansion of the CSRD to listed SMEs will not only have impacts within the EU – it has broader implications for anyone doing business with an EU-listed SME. Reporting obligations under the CSRD are intense for large businesses but will be even more burdensome for SMEs who don’t have access to the same resources. Just how burdensome reporting will be depends on the final requirements of the SME standards.
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