Philip Dickemann

2024

Sustainability reporting is receiving increasing attention from various stakeholders and academic researchers. However, most studies have focused on large companies, with limited findings available for SMEs. These SMEs are also often considered the backbone of the European economy, representing most companies. The new CSRD will oblige SMEs listed on a regulated market to publish a sustainability report according to the new ESRS. This increases the urgency of closing the knowledge gap. The study analyses the sustainability reporting of German and Austrian SMEs, expected to be affected by the CSRD starting in 2026. The analyzed companies are classified into nine groups using a 3x3 matrix based on their published sustainability data quality and whether they have a sustainability report covering all ESG areas, only parts of them, or none. This classification was used for various analyses, such as differences between SMEs of different sizes, ages, or sectors. Additionally, the frameworks used by SMEs and the content of their reports were analyzed. The analysis revealed that the quality of published data was generally poor. Only a small number of entities have published a sustainability report that covers all ESG areas and meets high-quality standards. Additionally, SMEs typically do not utilize a reporting framework or standard. However, larger SMEs tend to publish more comprehensive and higher-quality sustainability reports, while no definitive trends are discerned across sectors. Notably, older SMEs tend to be hesitant about publishing sustainability reports. This study presents an overview of sustainability reporting by German and Austrian SMEs that are expected to be impacted by the CSRD. It highlights the need for improvement in this area within these companies.