EU Body Releases Reporting Standards for SMEs to Aid Access to Finance

The body tasked with developing EU financial reporting standards, including sustainability reporting, has developed a set of reporting guidelines for small to medium businesses (SMEs) to help facilitate their access to finance and to standardise sustainability data requests. 

It has released for comment two standards: one a voluntary sustainability reporting standard for non-listed SMEs (called the VSME) and the other a reporting standard for SMEs that are public-interest entities (called the LSME), which includes issuers of transferable securities bonds, shares and other securities traded on an EU regulated market.

The first draft aims to improve the management of the sustainability issues SMEs face. It aims to help them meet the requests for data and information from banks, lenders and other finance bodies to facilitate their access to finance, and help them satisfy the data request from larger companies, which will be required to assess and report on their suppliers’ climate and sustainability activities. The latter includes the scope 3 emissions data larger companies will be required to disclose. It is accompanied by a draft Basis for Conclusions (LSME) and a draft Addendum to the Basis for Conclusions.

The second draft for the LSME public-interest entities and applies from 1 January 2026 with an additional two-year opt out period. They will have a choice as to how to present their sustainability statement in accordance with the sustainability reporting standards. Again, these are designed to standardise sustainability information and facilitate access to finance.