Sustainability Reporting for SMEs: Empirical Evidence from the Ongoing Debate in Europe

This thesis is the result of a theoretical and empirical investigation, carried out over three years of research connected to my doctoral scholarship. This investigation is centered on three main research questions (RQs): RQ1: What new obligations, regarding sustainability reporting, have been introduced for SMEs by recent European Directives and Regulations? RQ2: To what extent could EFRAG modify its standards for SMEs’ sustainability reporting, based on data collected through the public consultations? RQ3: How many listed SMEs in Italy and France, although not obliged, currently disclose sustainability information? What are the forms, level of detail and reliability of such reporting? The research is structured into three main chapters, preceded by a theoretical framework, and culminates in a concluding commentary on the conceptual and empirical evidence gathered. The framework section aims to introduce the logical connections guiding the entire study, seeking to integrate Stakeholder Theory, Institutional Theory, Legitimacy Theory and Overload Theory into a cohesive vision. These theories, in my view, offer an interdisciplinary perspective necessary to understand the complex dynamics developed in the subsequent sections of the thesis. The first chapter analyzes the historical and conceptual evolution of the sustainability theme linked to accounting. The aim of this section is to provide a clear overview of how sustainability has evolved over time, as a growing need to respond to new demands related to global environmental, social and economic challenges. In addition, the chapter delves into the link between sustainability and finance, with a particular focus on the emergence of ESG metrics and their integration into corporate evaluation and investment processes. This chapter also examines the evolution of sustainability from historical and conceptual perspectives, exploring key topics that have led to the complex regulatory framework we know today at both international and, more prominently, European levels (RQ1 – conclusions section). Within this context, subchapter 1.4 and its respective subsections are central, as without them, understanding the following sections of the thesis would be challenging. The second chapter, focusing on the European context, concentrates on sustainability reporting in SMEs. Specifically, this chapter examines the reporting standards developed by EFRAG, both for listed SMEs (LSME-ESRS) and for unlisted ones (VSME). The analysis highlights formal and substantive requirements, emphasizing the main differences, not only between the two approaches but also with the ESRS standards already in force for listed companies. To substantiate these reflections, the chapter explores in detail the content of EFRAG’s public consultations required for LSME and VSME, mapping the interviewees to the consultation and synthesizing the key points of their responses (RQ2 – conclusions section). The aim of this chapter is to focus on a challenging and complex topic, namely deriving insights and reflections on a new accounting situation never before applied to SMEs. The third chapter introduces the empirical analysis, which represents the core of the thesis. Through a rigorous methodological approach based on Content Analysis, this section identifies the study sample, defines the relevant variables and analyzes the data collected to test the research hypotheses. The empirical results are discussed considering the theoretical framework, with the aim of providing a precise and rigorous contribution that can enrich the scientific debate on the topic, as well as disseminate reference models useful for professionals (RQ3 – conclusions section). Finally, the thesis concludes with a critical and detailed commentary connecting the theoretical and empirical evidence, offering insights for future research and practical implications. Specifically, this section is organized to respond precisely and thoroughly to the RQs, with the aim of providing findings that align with the RQs that guided this study.