EFRAG publishes draft standards for sustainability reporting by SMEs

These standards are intended to reduce the burden on reporting SMEs by adapting the depth of requirements to the complexity of small and medium-sized enterprises (SMEs).

The first draft contains the standard for sustainability reporting by listed SMEs (ESRS LSME (draft)), which is mandatory from 1 January 2026 (or at the latest from 1 January 2028, taking into account the two-year transition period). The standard comprises three general sections ('General requirements', 'General disclosures' and 'Policies, actions and targets') and three sections on metrics ('Environment', 'Social' and 'Business conduct'). The draft standard is accompanied by a draft Basis for Conclusions (LSME) and a draft Addendum to the Basis for Conclusions.

The second draft proposes a standard for all other SMEs that voluntarily publish sustainability reporting (ESRS VSME (draft)) and is divided into a 'Basic Module' and two optional modules 'Narrative Policies, Actions and Targets (PAT)' and 'Business Partners'. This draft is also accompanied by a draft Basis for Conclusions (VSME). This standard for voluntary reporting is intended to support non-listed SMEs in meeting the information requirements of banks, investors and their downstream value chain in a standardised form.

Feedback on the drafts should be submitted via online forms, which can be accessed via an EFRAG website.

The consultation period for both drafts runs until 21 May 2024.

Until 31 January 2024, interested users can also register with EFRAG for a "field test" on the application of the draft ESRS SME standards (see EFRAGS’s Call for participation in the field test).