CSRD Sustainability Reporting For Non-listed SMEs: European Regulators Remain Challenged

Abstract

Abstract 438The recently adopted Corporate Sustainability Reporting Directive (CSRD) requires all large undertakings as well as listed SMEs to report on sustainability matters. Albeit not in the direct scope of the CSRD, non-listed SMEs will be de facto obliged by their business partners and investors to report accordingly. Hence, a separate reporting standard for non-listed SMEs is of pivotal importance. The CSRD, however, fails to endow the European Commission with the necessary delegated legislative power. Yet, EFRAG plans to develop standards specifically designed for non-listed SMEs. The European Commission may and should publish those standards as non-binding recommendations under Art. 288 para. 5 TFEU. Prior to that, the Commission must feed those standards into the endorsement procedure established by the CSRD regarding delegated acts.439