EIC invites companies to shape SME sustainability reporting standards

The European Innovation Council is calling on its funded companies to participate in a field test run by EFRAG on draft sustainability reporting standards for small and medium sized enterprises. The exercise asks participants to test draft requirements using a questionnaire and to provide feedback that may influence future reporting rules for SMEs. Companies interested in participating were asked to register by 31 January 2024 via the EFRAG field test page or to express interest by emailing the EIC team contact.

What the field test involves and why EIC is promoting participation

The field test offers EIC beneficiaries a chance to see draft standards in practice and to surface practical issues early in the standards development process. The EIC frames this as an opportunity to help drive the development of sustainability reporting requirements while also giving participating companies visibility at the EIC Summit 2024. That event will include a workshop on ESG reporting for start ups and SMEs on 19 March where participants in the field test are invited to take part in a panel discussion with experts from EFRAG and investor groups.

Context and relevance for SMEs and start ups

Investors are increasingly taking environmental social and governance factors into account when making investment decisions. That trend is driving demand for consistent disclosure from companies of all sizes. The European standard setting process seeks to create clarity and comparability but it also raises questions about compliance costs and administrative burdens for smaller firms. For SMEs that are scaling quickly the trade off is between increased transparency that can unlock investor interest and the internal cost of collecting and verifying new categories of information.

Participation in a field test is voluntary. While it gives companies a chance to influence standards and to gain early familiarity with reporting expectations it is not the same as a formal consultation or a guarantee of how requirements will be finalised. Companies should view this as an opportunity to highlight practical challenges and to surface data gaps that may need addressing before any formal rules apply.

Practical considerations before signing up

Smaller companies and start ups that consider taking part should take stock of the data they can already produce and where new processes would be required. Typical areas covered by draft sustainability standards include greenhouse gas emissions and climate transition targets product or operational impacts on people and communities and governance around sustainability policies. Preparing a responsive submission will usually require internal coordination across finance operations and product or technical teams.

EIC Summit 2024 workshop and visibility opportunity

The EIC Summit 2024 runs across three days from 18 to 20 March with a beneficiaries day on 19 March. The EIC is organising a workshop on ESG reporting for start ups and SMEs on 19 March from 15:15 to 16:00 that will include a panel with experts from EFRAG VentureESG and investor representatives. EIC portfolio companies that participate in the field test are especially encouraged to join the session to showcase their work and to connect with other leaders in the field. The Summit took place at the Tour and Taxis site in Brussels and included networking and project exhibition opportunities.

As a final practical note the EIC included a standard disclaimer clarifying that this outreach is provided for knowledge sharing and should not be read as an official stance of the European Commission or other organisations involved.

Further reading and next steps

To sign up companies should consult the EFRAG field test page referenced by the EIC and contact Hannah Schmidberger at Hannah.schmidberger@ec.europa.eu for EIC specific coordination. Firms that plan to participate should identify internal data owners prepare relevant emission and human rights incident information and consider testing the listed SME standard even if they are currently unlisted to understand higher end expectations.