ESG Reporting in Danish Non-listed SMEs - Determination of Readiness and Recommendation of Possible Transitions
Term
4. Term
Publication year
2024
Submitted on
2024-06-06
Pages
79
Abstract
With the introduction of the CSRD, mandating large companies to report on ESG matters, this thesis examines how Danish non-listed SMEs can prepare for ESG reporting based on the draft of the VSME standard. This includes investigating the pressures on SMEs, the readiness of SMEs and recommendations for a transition that can foster their readiness towards ESG reporting. This thesis is based on a case study design, where four case companies are representing SMEs from different sectors. A qualitative methodology was used, which includes literature review, interviews with case companies and experts, document analysis of the VSME and existing ESG reports, gap analysis and use of grey literature, webinars and events. With the use of institutional theory, multiple pressures were identified. Here it was found that SMEs experience the most pressures from indirect regulative aspects, but are also facing normative and cultural-cognitive pressures. Through a gap analysis of the current status in the case companies and the requirements in the VSME standard, the largest gaps were identified to be related to environmental matters. Whereas the case companies were more ready to report on social and governmental matters. However, it was seen that the case companies were not ready to report on the basic module, which is the minimum requirement of the VSME. This means that there is a gap between the SMEs and the VSME requirements, which creates the need for recommendations for transition in SMEs, to enhance their readiness for ESG reporting. Based on transition management, the overall recommendations for SMEs are to develop long term strategies and ESG visions, set up formal structures for ESG reporting, build up a transition agenda, mobilise external stakeholders and collect and report on ESG data.
Keywords
CSRD ; ESRS ; VSME ; SME ; Transition ; ESG ; Reporting ; Sustainability
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