Reporting of Non-Financial Information by SMEs
EFAA publishes results of survey across 14 European Countries
While the EU Directive on Non-Financial Information(NFI) Disclosure only applies to larger companies, preliminary results from the EFAA survey suggest that NFI reporting is quite common for SMEs due to national requirements. Furthermore, there is also growing interest in the benefits of integrated thinking and reporting by SMEs.
The survey’s findings have implications for regulators and policy makers seeking to harmonise in the shape and form of SME reporting and to enhance the transparency of societal and environmental impacts of corporate activities across the European Union. The findings might also have an influence on SMEs and small and medium-sized accountancy practices (SMPs) in pursuit of the Sustainable Development Goals (SDGs) and the corresponding need to measure economic, social and environmental performance.
Paul Thompson co-author of the report and Chair of the EFAA Assurance Expert Group explained: “There are growing pressures from the general public for businesses to explain how their activities impact the environment and society. Given that SMEs account for the majority of private sector GDP, employment and environmental and social impact it is perhaps no surprise that some wonder whether SMEs disclose such impacts. This is a key motivation behind our conducting this survey.”
EFAA suggests that the following policy considerations should be taken into account for further discussion:
- SMEs should be encouraged to consider voluntarily providing NFI as this may yield benefits to them, their stakeholders and the wider public;
- Some elements of the Non-Financial Reporting Directive (NFRD) might be suitable for voluntary adoption by SMEs; and
- National regulators should be encouraged to refer to the NFRD if formulating NFI requirements for their SMEs as this will help enhance international comparability of NFI reporting by SMEs.
Download the survey here
For further information on the survey results please contact: firstname.lastname@example.org