The Reporting of Non-Financial Information by SMEs

Until now, small and medium enterprises (SMEs) have largely been left out of non-financial information (NFI) disclosures. However, this will change significantly with the Non-Financial Reporting Directive. This chapter analyses the stakeholders' perspective about three core aspects related to this: the usefulness of a simplified NFI standard and/or reporting format for SMEs; if that is an effective means of limiting the burden on SMEs; and, finally, in case of implementing it, if it should be mandatory or voluntary. Data were obtained from the stakeholders' answers provided during the public consultation conducted by the European Union about possible revisions of the Directive 2014/95/EU, from February to June 2020. The results show that the most controversial topic is the mandatory or voluntary nature of the simplified standard for SMEs. Furthermore, there are different opinions about the usefulness and effectiveness of a simplified standard for SMEs, particularly between capital providers versus other entities.