PMI, Efrag launches public consultation on ESG reporting standards

In view of the extension of the reporting obligations from the sustainability at SMEs listed starting from 2026, the European Financial Reporting Advisory Group (EFRAG) has launched a public consultation on the two draft standards relating to sustainability reporting principles for SMEs, listed (ESRS LSME ED) and non-listed (VSME ED). Stakeholders – let it be known the EFRAG – they now have until 21 May 2024 to submit their observations through the online consultation questionnaires. The stakeholders they are also invited to participate in the field tests that will be conducted together with the public consultation: the deadline for submitting interest is set at January 31, 2024.

Public consultation on ESG reporting standards

“The SMEs represent a crucial part of the European economy. Following the completion of the ESRS for large enterprises, EFRAG – states Patrick de Cambourg, Chair of the EFRAG SRB – publishes these two proposed standards to help SMEs to participate in the transition towards a more sustainable economy, obtaining adequate access to financing and reducing the burden of managing uncoordinated data requests when preparing decisions-information useful for all”.

“These two Exposure Drafts – underlines Chiara Del Prete, president of EFRAG SR TEG – respond to the effort to develop a set of sustainability information that is both proportionate to SMEs and capable of supporting the provision of the information we already see – and increasingly expect to see – requested by commercial counterparts. For the success of our voluntary standard for unlisted SMEs, market acceptance will be key. We expect this consultation to help us finalize standards that will meet the expectations of all stakeholders.”


Within the mandate conferred on him by Corporate Sustainability Reporting Directive (CSRD) to provide technical advice to the EU Commission on European Sustainability Reporting Standards (“ESRS”), EFRAG was tasked with developing the SME standard. These include those whose transferable securities (bonds, shares and other securities) are admitted to trading on a regulated market in the European Union, small and non-complex institutions and captive insurers and reinsurers (collectively known by the acronym “LSME”). . The LSME standard will be issued as a delegated act and will enter into force on 1 January 2026. The purpose of the standard is to establish reporting requirements proportionate and relevant the scale and complexity of activities and the capabilities and characteristics of SMEs to help them gain better access to finance and avoid discrimination against them by financial market participants. The standard for listed SMEs is composed of three general sections, “General requirements”, “General information” and “Policies, actions and objectives”, and three sections dedicated to parameters, “Environment”, “Social” and “Business conduct”. .


EFRAG has also developed a voluntary sustainability reporting standard for non-listed SMEs (VSMEs). EFRAG’s proposal is a simple reporting tool to assist unlisted micro, small and medium-sized enterprises in responding to requests for sustainability information they receive from corporate counterparts (i.e. banks, investors or larger companies to which SMEs are suppliers unlisted) in an efficient and proportionate manner, as well as to facilitate their participation in the transition to a sustainable economy. According to EFRAG’s forecast, the Unlisted SME Exposure Draft is expected to standardize the current multiple requests for ESG data (which represent a significant burden for unlisted SMEs), reducing the number of uncoordinated requests they receive. This will provide them with support in accessing sustainable financing from financiers, investors and customers. The standard is divided into a Basic Module and two additional optional modules, a Narrative-Policies, Actions and Objectives (PAT) Module and a Business Partners Module.

The ESRS LSME ED and VSME ED consultation

Public consultation launched from EFRAG is designed to receive feedback on key aspects of the Exposure Drafts, including the “proposed architecture”, the “implementation of CSRD requirements”, (for listed ELEs), the “relevance of the proposed disclosure”, the “simplifications implemented” and “market acceptance”.

Respondents must provide their answers to the questions of the public consultation using the online questionnaires (one for listed companies and one for non-listed companies). Both questionnaires consist of two parts: “Part 1” (the more “critical” questions that EFRAG encourages you to answer in full) and “Part 2” (additional and more detailed technical questions that EFRAG encourages you to answer as much as possible).

The field test

The field test focuses on the feasibility, costs, challenges, benefits and usefulness of individual disclosures and suggested improvements to Exposure Drafts. The test consists of preparing part of the information contained in the Exposure Draft by 21 April 2024 and, on this basis, answering the field test questionnaire for SMEs (listed and unlisted). Companies will then be invited to workshops or individual interviews to share their experience in preparing the information and to illustrate their feedback. Those who are unable to engage in disclosure preparation can also participate in workshops based on their analysis of Exposure Drafts.