By Paco Álvarez
Within the framework of the European directives on sustainability reporting that are being drafted in Brussels (CSRD, CSDDD), multiple events are currently being organized to try to explain the content of these directives. In this regard, it should be noted that the regulatory development of the CSRD has been entrusted to EFRAGThis process is still under development, particularly with regard to SMEs.
According to the EU definition, an SME is an organization with 1 to 250 employees. This term is still being debated in Brussels, simply because the aims of the European sustainability directives would be meaningless if the 98% of companies were excluded.
Until now, these directives have focused on listed companies with more than 500 employees. The CSRD has lowered the bar to include companies with more than 250 employees and listed SMEs, given that the latter represent 0.001 percent of European companies. The remaining SMEs will be asked to submit their sustainability reports voluntarily and using a simplified format.
In principle, the EFRAG meetings have shown that, despite what has been approved by the European Parliament regarding large companies and listed SMEs, the underlying problem remains the incorporation of micro, small, and medium-sized enterprises into the dynamics of sustainability, of true sustainability, that is, their ability to prepare financial, social, and environmental reports.
One of the directives that is less talked about, or not at all, is the one known by the acronym ESAP (European Single Access Point), whose objective is to have a registry containing the sustainability reports of all European companies.
What is the purpose of the existence of this registry? Simply put, citizens can access it at any time to verify that the company they work for, or from which they purchase products, is registered and, therefore, is reporting its sustainability performance.
Not being included in it will obviously have a negative impact on their image, their ability to participate in European projects, and their ability to obtain funding in the future. So, can we exclude SMEs from this registry? The answer is clearly NO.
Therefore, as I mentioned earlier, EFRAG is exploring how to propose simplified sustainability reporting that would allow SMEs to do so, even though the CSRD directive states that it is voluntary for them. Is this sufficient? The answer is NO.
"In addition to simplifying sustainability reporting for SMEs, it's necessary to create financial support that allows smaller companies to have external staff prepare the reports."
The EU definition of an SME encompasses 1 to 250 employees, which means that if a solution is found to simplify sustainability reporting for SMEs Will companies with 10 employees have the same amount of time and money to prepare reports as companies with 250? The answer is NO.
Therefore, In addition to simplifying sustainability reporting for SMEs, it is necessary to create financial support that allows smaller companies to have external staff prepare the reports.
That's exactly it, what the government of the Valencian Community has done, by creating a registry that proposes a tool so that SMEs with fewer than 50 employees can easily prepare a sustainability report, and in turn, create aid so that those with limited resources can have external personnel prepare sustainability reports.
This initiative is groundbreaking, and it is recognized in the Brussels forums where sustainability directives are being formulated.
