Beyond compliance: an empirical analysis of SMEs’ sustainability reporting practices

Purpose: this dissertation explores the extent to which non-listed SMEs engage in voluntary sustainability reporting and examines the key drivers and barriers influencing their disclosure practices. While SMEs are not subject to mandatory reporting requirements, voluntary reporting is gaining importance as businesses recognize its strategic value. Methodology: the research employs a mixed-method approach, combining a literature review with a large-scale quantitative analysis of 2,000 non-listed SMEs in the Veneto region and qualitative interviews with selected preparers. The study first conducts a quantitative assessment of disclosure practices and then integrates insights from in-depth interviews to understand motivations, challenges, and benefits. Findings and contributions: the results indicate that sustainability reporting among SMEs is still limited, with most companies preferring website disclosures over formal reports. A possible correlation is observed between company size and disclosure levels, as larger firms are more likely to report. Environmental topics are the most frequently addressed, and the GRI framework remains dominant. Internal drivers, such as strategic planning and operational awareness, outweigh external pressures, although peer influence plays a role. Financial constraints and lack of expertise emerge as key internal barriers, while externally, the absence of standardized reporting guidance is a major challenge. The study reinforces Agency Theory, Resource-Based View, and Institutional Theory. Practical implications: the third chapter of this dissertation research has a guidance-oriented function for SMEs considering sustainability reporting. Interview findings highlight the need for sector-specific guidance, integrated reporting software, and simplified regulatory frameworks. To address these needs, the thesis examines the VSME Standard as a potential tool for SMEs and explores the "Dialogo di Sostenibilità tra PMI e Banche" as a practical guide for engagement with financial institutions. Future research opportunities: future research could track the adoption of the VSME Standard in the same sample over time, assessing its impact on preparers’ access to credit. Extending the analysis beyond the Veneto region could offer comparative insights, while other studies could evaluate whether initial reporting costs will transition into long-term financial and operational benefits.