1 Introduction

The timely transition to a sustainable economy is the priority of the European Green Deal. The European Commission has determined that enabling this transition demands a review of the Non-Financial Reporting Directive and the issue of European Sustainability Reporting Standards. This review of the Non-Financial Reporting Directive was launched in 2020 with a public consultation to canvass stakeholders´ views on this field. SMEs require specific solutions, as pointed out in one of the key messages included in the feedback summary: “Strong support for simplified standards for SMEs: 74% of respondents support the development of simplified standards for SMEs. 46% replied that such standards should be mandatory for SMEs, and 39% replied that they should be voluntary. The respective figures for respondents who are or who represent SMEs are 27% mandatory and 64% voluntary” (European Commission, 2020, p. 3).

In March 2021, the European Financial Reporting Advisory Group -Project Task Force on Non-Financial Reporting Standards published the report “Proposals for a relevant and dynamic EU sustainability reporting standard-setting” in which the likely future standard setter proposed the way to tackle this challenge. Simultaneously, the European Financial Reporting Advisory Group published the report about its future governance, setting out the changes needed if it assumed the role of setting European non-financial reporting standards.

On 21 April 2021, the European Commission launched a proposal for a Corporate Sustainability Reporting Directive, which would amend the existing reporting requirements and where was replaced the term "non-financial" with "sustainability".

The European Council gave its final approval to the Corporate Sustainability Reporting Directive on 28 November 2022. European companies will soon be required to publish detailed information on sustainability matters. The new requirements will increase a company’s accountability, prevent divergent sustainability standards, and ease the transition to a sustainable economy.

The scope of the Corporate Sustainability Reporting Directive is extended to all large companies and all companies listed on EU-regulated markets (except listed micro-enterprises). It, therefore, includes companies with between 250 and 500 employees. However, it does not introduce new reporting obligations on SMEs other than SMEs listed in EU-regulated markets (Marín et al., 2021). The Corporate Sustainability Reporting Directive includes the adoption of European Sustainability Reporting Standards developed by the European Financial Reporting Advisory Group. Significantly, the Corporate Sustainability Reporting Directive includes the development of separate, proportionate standards for SMEs, applying the “Think small first” as a generally accepted principle for all legislation aimed at the private sector. “Non-listed SMEs—representing the great majority of SMEs—may voluntarily use these proportionate standards for SMEs. The European Commission believes this proposal is proportionate, striking the right balance between meeting the needs of investors and other stakeholders for sustainability information from companies and limiting the potential administrative burden for companies themselves” (Marín et al., 2021).

Related to SMEs´ sustainability challenge is the crucial role of SMPs. SMEs typically lack the technical expertise and resources to undertake sustainability reporting, just as they often lack the same to do their financial reporting (EFAA, 2019). Often they will need and seek outside help in the form of accounting firms, particularly SMPs. SMPs are the most important and trusted business advisors and personal advisors of SME owner–managers. However, SMPs can also be SMEs themselves (EFAA, 2019). SMPs provide various professional services to SMEs: Audit and assurance, accounting, tax advice, and advisory services (IFAC, 2021). Professional accountants must comply with high standards of integrity and competence embodied in strict ethical codes and educational requirements. In providing professional services to their clients, SMPs are required to apply professional standards (EFAA, 2019).

About the literature on the subject, although there are numerous studies in this field, they are based on large companies, and the research gap on SMEs, and hence SMPs, is still significant, with only limited studies as Khoja et al. (2022) and La Torre et al. (2020) highlight. Tailor responses are needed since the current European regulation on the subject has to be rethought to evolve from a one-size-fits-all approach to different views that also encourage adopting alternative activities by practices, as Pizzi et al. (2022) claim. SMEs are the vast majority of European companies and the backbone of the European economy (Ortiz-Martínez & Marín-Hernández, 2021). Their sustainability steps are influenced by other specific factors, such as their stakeholders´ proximity (Lähdesmäki et al., 2019; Spence, 2016).

Bearing in mind the essential role to play for SMPs in the European sustainability landscape, we take advantage of the EFAA members to conduct this study using focus group methodology. EFAA is an umbrella organisation for national accountants and auditors’ organisations whose individual members primarily provide professional services to SMEs within the European Union and Europe. It was founded in 1994. EFAA has 13 members throughout Europe representing over 350,000 accountants, auditors, and tax advisors that provide services to millions of SMEs. EFAA´s logo is “the big voice of SMPs and SMEs in Europe”, as its website explains (https://efaa.com/about-us/).

This paper focuses on the recent European developments setting new legislation and standards. However, it aims to identify the role of SMPs in sustainability reporting and assurance by SMEs. Concretely, this paper addresses four practical questions concerning this role: What the importance of sustainability services is for SMPs currently and will be in the future; what the importance of sustainability reporting is, and why SMPs are best placed to prepare sustainability reports and provide assurance on them. The background mainly focuses on large companies and lacks a study of the essential role SMPs can play in the European sustainability landscape. Therefore, as a theoretical contribution, this manuscript fills a noticeable gap in the research literature. The methodology is based on a survey questionnaire from a focus group of accounting experts. The experts are all members of the EFAA.

The main findings indicate that SMPs are ready to fulfil this emerging role, which will demand significant reskilling. Also, the more experienced the SMPs, the more likely SMEs are to seek their advice, are more conscious about sustainability practices, and advise their SME clients accordingly. Finally, as a practical contribution, the need for the support of professional accountancy organisations to help SMPs in this significant reskilling can be highlighted.

Therefore, this manuscript significantly contributes to the current discussion on the need for sustainability standards and guides developed explicitly for SMEs and SMPs. Until now, sustainability disclosure and standards have been mainly focused on large companies and so on large practitioners, but in the debate on this topic, this paper adds arguments to the claim for the role of non-listed SMEs and SMPs that are linked to them in the sustainability journey. It is only possible to cope with the sustainability challenge with the implication of non-listed SMEs and their SMPs, as they are the backbone of the European economy. Although non-listed SMEs are not scoped in the Corporate Sustainability Reporting Directive and the European Sustainability Reporting Standards, there are effects on the value chain and a “trickle-down” effect. Hence, there is also a need to establish standards for them, as recommendations or guidelines, to succeed in the goal of sustainability practices and reporting, which is mainly in the hands of the SMPs. The structure of this paper is as follows: In the first part, we clarify the concepts used in the research and explain the theoretical background. In the second part, we explain the research method. Finally, the results and conclusions are presented.

2 Background

Studies on non-financial or sustainability reporting are traditionally linked to large companies, multinationals, or listed enterprises (Baumann-Pauly et al., 2013; Bonifácio Neto & Branco, 2019; Dincer & Dincer, 2010; Torugsa et al., 2012). Nevertheless, the fundamental theories that justify research on sustainability disclosure can be shared regardless of the type of company and hence, are valid for the case of SMEs. Most reporting research is based primarily on agency theory (Jensen & Meckling, 1976), followed by stakeholder and legitimacy theory (Brammer & Pavelin, 2006). According to legitimacy theory, companies disclose to seek legitimacy from their stakeholders on their practices (Fatma et al., 2014; Zamil et al., 2021). Although the larger the company, the more powerful its stakeholders it takes for large companies to show a significant relationship between their practices and reporting (Albers & Günther, 2010; Reverte, 2009). Legitimacy theory also supports that sustainability disclosure is a tool to send signals to the market (Brammer & Pavelin, 2006) and positively impact capital markets (Schiehll & Kolahgar, 2021). Another argument favoring sustainability reporting based on legitimacy theory is the positive effect on company reputation (Momin & Parker, 2013). However, there is also internal legitimacy, and both external and internal can trigger sustainability disclosures to answer all pressures (Hillman & Wan, 2005; Hine & Preuss, 2009; Sridhar, 2012).

Some argue that SMEs are better at adopting corporate social responsibility or sustainability practices than big-sized companies because they have less sophisticated structures and can do it informally. It is firmly integrated into the company culture (Ram et al., 2001). However, SMEs do not have the same resources as large companies, which is a handicap to translating practices into sustainability reporting (Cantele & Zardini, 2020). When comparing the sustainability reporting practices of large companies with SMEs, it has been concluded that SMEs show a worse sustainability profile (Ramos et al., 2013).

There is a contrast between the internal implementation of corporate social responsibility-related practices, which is better in SMEs than in multinational companies, and external communication and reporting of these practices, which is better in multinational companies than SMEs. These differences are because organisational characteristics vary with company size (Baumann-Pauly et al., 2013). Furthermore, SMEs represent 99% of all businesses in the EU and vary significantly in size and nature from micro-enterprises to quite sophisticated medium-sized companies whose corporate social responsibility practices can be a mixture of small and large companies (Preuss & Perschke, 2010).

Even in develo** countries such as Nigeria or Tanzania, SMEs undertake their corporate social responsibility practices to varying degrees in multiple spaces (Amaeshi et al., 2016). Nevertheless, SMEs face many problems when implementing sustainability reporting and often need help to see its value: Listed SMEs can benefit from an improved reputation (Parsa & Kouhy, 2008). Concerning environmental issues, Brammer et al. (2012) conclude that while most small businesses are engaged in environmental initiatives, there is significant heterogeneity in this engagement due to the fewer benefits perceived. For this reason, it is necessary to develop sustainability reporting standards for SMEs that are tailored to their characteristics as envisaged in the proposed Corporate Sustainability Reporting Directive (Commission, 2021). Some research theoretically proposes sustainability indicators from other general frameworks, such as the Global Reporting Initiative, but considering SMEs specificities, as is the case of Arena and Azzone (2012) for a network of Italian steel industry SMEs. To become more sustainable, SMEs need to innovate. However, SMEs typically lack the required resources and capital to innovate (Knight et al., 2019) and only tend to do it when there is pressure from customers or policymakers through regulation (Dey et al., 2020), as the legitimacy theory argues it. The multiple difficulties that SMEs face with the sustainability challenge can be overcome if the owner has the motivation, philosophy, and determination to adopt sustainability practices in the business (Eweje & Gabriel Eweje, 2020; Sánchez-Medina et al., 2015). Management attitudes can positively benefit the SMEs´ cost–benefit equation (Knight et al., 2019). Given their reliance on external advice, it can be easier for an SMP to influence the decision-making process of their SME clients and improve the quality of their sustainability reporting, which improves their sustainability. So the role of professional accountants can even accelerate the sustainability process (Al-Muhanadi et al., 2020).

While European SMEs are presently not required to disclose sustainability information, they increasingly have to do so. This is because SMEs are typically in value chains populated by large companies subject to reporting requirements and have a solid capacity to influence SMEs (Santos, 2011). However, even this value chain pressure can discourage SMEs from sustainability initiatives, decreasing their motivation to engage (Ciliberti et al., 2009). Similarly, financial entities increasingly ask for sustainability information from SMEs seeking finance. These effects, initially dubbed "trickle-down" in the context of financial information (Lang & Martin, 2017), can be extended to non-financial or sustainability information and are assumed as a substantial indirect impact from the Non-Financial Reporting Directive (Zarzycka & Krasodomska, 2022). These pervasive market requirements have important implications for SMEs: The industry is also an important factor influencing sustainability reporting (Williamson et al., 2006).

While the most relevant studies for this paper relate to the role of SMPs in SMEs´ sustainability reporting, most of these studies neither constitute nor contain empirical research. There are studies based on the literature analysis using online databases, such as Çalişkan (2014), who concludes that accounting professionals are challenged in this field mainly because of the lack of a clear definition of the relationships between accounting and sustainability reporting. One study examines the role of accountants in sustainability practices, though only from higher education accounting students (Junger Da Silva et al., 2020). The results reveal that the future role of accountants will have to be determined, which presents a challenge. Interestingly, female respondents maintain that the accountants´ role in implementing sustainability practices will be of greater importance than their male peers (Junger Da Silva et al., 2020). The accountancy profession is now leading the debate on the relationship between financial reporting and non-financial/sustainability reporting (Tilt, 2009).

Professional service offerings related to sustainability and the needs of firms have also been analysed, but only from the perspective of big firms of providers (Hartshorn & Wheeler, 2002). The study by Schaltegger and Zvezdov (2013) also studies the role of accountants using interviews. However, it is focused on their role in companies leading in sustainability reporting, and these companies are not SMEs. In the case of SMPs, the services they offer in the sustainability area are closely linked to the services provided in financial reporting. “The finance department has a significant role to play in the development of metrics for measuring sustainable practices and that operational risk management was the main action taken by the finance function to manage sustainability related risks. SMEs finance professional bodies are urged to help SMEs develop their skills base beyond those normally associated with financial accounting. This is important in order to equip finance officials in SMEs with skills to make key decisions pertaining to sustainability practices” (Kimanzi & Gamede, 2020, p. 1). Recently, the Association of Chartered Certified Accountants (ACCA, 2021b) published the study “How SMEs can create a more sustainable world. A playbook for accountants in practice and finance teams in small and medium-sized organisations”, which concludes that many SMEs are changing how they do business. These SMEs have found that adopting sustainability initiatives can reduce costs and create new opportunities for growth and profitability. They also recognise that this better prepares them for the future. Some have adopted a genuinely transformational strategy, placing sustainability at the heart of their purpose to make a difference by solving some of the world’s biggest challenges.

On the other hand, the Association of Chartered Certified Accountants (ACCA, 2021a) has published an interesting survey on “Accountants and SMEs creating a sustainable world: SME community view”, which finds that SMEs and SMPs need softer forms of support that would enable them to kick-start conversations about sustainable transformation, and which would guide them through the whole journey of sustainable transformation, becoming advisers in that field, and reporting on sustainability. Many SMEs will need capital to finance the innovation needed for this transformation, and SMPs can help in this endeavour (Dey et al., 2020). Other studies include findings related to the role of professionals in addressing the sustainability challenge. For example, Cuadrado-Ballesteros et al. (2017) study the effects of sustainability assurance on the mitigation of information asymmetry, and they investigate the role of accountants and the level of assurance provided on sustainability information. They conclude that information asymmetries are mitigated by an accounting professional providing “reasonable” assurance.

There is also a need for more data about SMEs and SMPs when researching sustainability reporting, so researchers tend to adopt a qualitative research approach. Most studies use questionnaires or surveys (Agostini et al., 2021; Amaeshi et al., 2016; Brammer et al., 2012; Dey et al., 2020; Hartshorn & Wheeler, 2002; Ramos et al., 2013). Others study a company network from a theoretical perspective (Arena & Azzone, 2012) or apply qualitative criteria for case study research (Baumann-Pauly et al., 2013; Eweje & Gabriel Eweje, 2020). Finally, within the qualitative studies, others directly interview practitioners, SMPs, or sustainability practitioners, through structured or semi-structured interviews (Mitra & Buzzanell, 2017; Taherkhani et al., 2021).

In this study, we aim to help fill a crucial gap in the research literature by studying the essential role that SMPs can play in the European sustainability landscape. There is a need to add knowledge in the SME field that needs further development (Zarzycka & Krasodomska, 2022). Although there are numerous studies in this field, they are focused on large companies, and the research gap on SMEs, and hence SMPs, is still significant, with only limited studies as Khoja et al. (2022) and La Torre et al. (2020) highlight. Furthermore, tailored responses are needed since the current European regulation on the subject has to be rethought to evolve from a one-size-fits-all approach to different views that also encourage adopting alternative activities by practices, as Pizzi et al. (2022) claim. Furthermore, it is not a minor objective, bearing in mind that SMEs are the majority of European companies and the backbone of the European economy (Ortiz-Martínez & Marín-Hernández, 2021). For this purpose, we use a focus group methodology using a questionnaire sent to experts serving as volunteers of the EFAA. This paper addresses and answers four practical questions concerning the role of European SMPs in SMEs´ sustainability reporting and assurance:

  • -What is the current importance of sustainability/non-financial services for SMPs?

  • -What is the importance of sustainability/non-financial matters in the future for SMEs from the point of view of SMPs?

  • -What is the importance of sustainability/non-financial reporting issues for SMEs from the point of view of SMPs?

  • -Why are SMPs best placed on preparing sustainability reports and assuring them?

3 Methodology

We have adopted the methodology of the focus group, which has been broadly used as a qualitative research tool in different fields of knowledge (for example, for medical research, it is discussed byVermeire et al. (2002)) and has gained popularity (George, 2013; Kress & Shoffiner, 2007; Luke et al., 2019). “Focus group discussion is frequently used as a qualitative approach to gain an in-depth understanding of social issues. The method aims to obtain data from a purposely selected group of individuals rather than from a statistically representative sample of a broader population” (Nyumba et al., 2018, p. 20). We adopt this methodology because our research objective is to identify the role of SMPs in SMEs´ sustainability reporting. The best way to do this is to canvass the views of the most informed respondents. Accordingly, we select as our focus group experts of the EFAA—the members of its four expert and working groups, its board members, and two special advisors (https://efaa.com/about-us/).

As this is a topic with scarce research literature, we want to obtain general background information, diagnose potential challenges, and learn how respondents talk about this phenomenon of interest. With these goals, focus groups are suggested as appropriate (Stewart et al., 2007). We use a questionnaire online to address the weaknesses of focus groups—interviewer bias and the problems of interactions within the group—to obtain positive aspects of other qualitative research techniques, such as the Delphi method (Petty, 2017). Furthermore, we provide details about the sample size and group size and describe the methodological details, another common problem found with focus groups (Carlsen & Glenton, 2011; O.Nyumba et al., 2018).

Although one of the preferred methods for construct validation of questionnaires has traditionally been the confirmatory factor analysis, it is shown in a review of the literature on the confirmatory factor analysis by Prudon (2015) that the feedback provided is very limited, and the obtained results appear to be problematic. Besides this, together with all the highlighted pros of focus groups, it has to be taken into account that it offers an effective means to assess dispositions, attitudes, ideas, and experiences (Pearson & Vossler, 2016), which are benefits of using it remarkable for our research.

The questionnaire´s content has been shaped according to the proposals of the European Financial Reporting Advisory Group—Project Task Force on Non-Financial Reporting Standards. The European Financial Reporting Advisory Group, in particular its European Lab Steering Group, created this Project Task Force on Non-Financial Reporting Standards to respond to the mandate sent on 25 June 2020 by European Commission Executive Vice-President Dombrovskis, asking for recommendations on the elaboration of possible EU Non-Financial Reporting Standards (Reporting Lab, 2021). These proposals accommodate the specificities of SMEs: One of the “building blocks” of future European Sustainability Reporting Standards is “Including SMEs in the EU sustainability reporting landscape in a proportionate manner” (called Building Block 4) (Reporting Lab, 2021). The European Commission has duly borne in mind these proposals by including the proportionality principle and tailor-made SMEs sustainability reporting standards in the proposal for the Corporate Sustainability Reporting Directive (Commission, 2021).

The questionnaire draft was pilot tested by the chairs of each of the EFAA´s expert groups and one of the special advisors. It was amended after the first review. The final version of the questionnaire is included in Appendix.

The questionnaire comprises three parts: (i) Personal data including type of professional, years of experience, employing organisation, country, professional accountancy organisation, and email; (ii) questions 1–5 that ask for a rating with a five levels Likert scale. The number of levels included in the Likert scale is odd to give the participants a central option. These questions focus on the importance of activities related to sustainability/non-financial reporting statements and services performed by the SMPs concerning the financial statements. Also, the importance of future steps in the European Sustainability Reporting Standards relevant to SMEs, certain non-financial/sustainability reporting issues for SMEs, and views on the professionals best placed to prepare and assure sustainability reports. The last part of the questionnaire is (iii) questions 6–8. These are open ones to ascertain the general opinion of the respondents about the most important factors in the future development of sustainability reporting for SMEs, the advice that SMPs might give SMEs on how to be sustainable, and other remarks about the role of SMPs in SME sustainability reporting.

The questionnaire was sent on 4th October 2021 to the following experts: The chairs and members of all four EFAA expert and working groups (accounting, assurance, digitalisation, and EU professional regulation); to the EFAA Board members; and to the two EFAA special advisors. Some experts are members of more than one group. In total, 37 experts were targeted, all volunteers, with high-level experience and background in this field, from EFAA’s 13 member organisations, professional accountancy organisations. The respondents to the questionnaire are shown in Table 1.

Table 1 Questionnaire respondents
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Table 2 summarises the survey respondents´ roles and years of experience. Some respondents fulfil multiple roles, such as accountant and auditor. Most respondents are accountants, business advisers/consultants, auditors, tax advisers, and sustainability experts. At the same time, respondents are not necessarily sustainability subject experts. They advise in preparing and providing assurance on non-financial/sustainability information. One can see from Tables 1 and 2 that the respondents come from a broad range of European countries, from the largest to the smallest. It is also worth noting that the respondents are experienced professionals with a mean of more than 24 years of experience. The least experienced panellist has 10 years of experience, and the most experienced has 36 years of experience. The median years of experience are more than 25 years. These data support the validity of the focus group methodology.

Table 2 Role of respondents and years of experience
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The statistical analysis was performed with SPSS 24.0 for Windows. As the analysis is based on qualitative variables, we have obtained the number of cases for each category with the corresponding percentage and included some questions using the Likert scale. As a result, we have the minimum and maximum values, the mean, and the standard deviation for the ratings given by the respondents. To complete the empirical analysis, we examine whether there is a relationship between the respondents´ views and their years of experience. For this reason, we recodify the quantitative variable years of experience, converting it into a categorical one with two different options: Respondents with fewer years of experience than the mean and those with the mean (24.71) or more years of experience. We run contingency tables and Chi-square statistics and consider differences statistically significant, those where p < 0.1.

4 Results

4.1 Importance of sustainability/non-financial services for SMPs

Let us compare the SMPs´ services related to financial reporting, preparing financial statements, and auditing or other assurance on them with the other regarding sustainability reporting. The former is the most important professional service (Table 3, mean of importance is the largest for preparing financial statements for SMEs, 4.29, followed by auditing or other assurance on SMEs, 4.00). Less important are the services relating to advising SMEs about compulsory requirements for non-financial/sustainability reporting (2.60) and the need for preparing non-financial/sustainability statements (2.53). These results align with the fact that sustainability is a recent field for practitioners, although large companies are used to disclosing this type of information. Even practitioners in the emerging field of environmental sustainability argue that it is a tension-centred approach (Mitra & Buzzanell, 2017). Activities deemed not very important involve preparing sustainability statements (2.36) or verifying them (2.29). Finally, SMEs seem to infrequently ask about voluntary sustainability reporting (2.27) and its verification (1.86) as they do not count with the resources to translate practices into sustainability reporting (Cantele & Zardini, 2020) and it is voluntary (Marín et al., 2021).

Table 3 Importance of sustainability/non-financial services for SMPs
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These results are in accordance with agency theory, as SMPs´ services were focused on financial reporting to answer the needs of their shareholders (Jensen & Meckling, 1976). Nevertheless, the scope of stakeholders has increased. Currently, SMPs have to provide further services and cope with the sustainability challenge, as stated in the stakeholder theory (Brammer & Pavelin, 2006).

Table 4 shows a statistically significant relationship between the length of experience and the importance of preparing non-financial/sustainability statements for SMEs (Table 4). The more experienced the SMPs, the more likely SMEs are to seek advice. The more experienced SMPs are more conscious about sustainability practices and advise their SME clients accordingly. The 55.6% of respondents with more than 24.71 years of experience assign more importance to services related to preparing non-financial/sustainability reporting statements. (The maximum rating of importance for this question is 4.) Sixty percentage of SMPs with less than 24.71 years of experience rate these services as less important. It seems to be an internal pressure related to SMPs´ experience, which can be linked to the legitimacy theory (Hillman & Wan, 2005; Hine & Preuss, 2009; Sridhar, 2012).

Table 4 Contingency table of years of experience and importance of sustainability/non-financial services for SMPs
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When we analyse the responses to open question 7 about the SMPs´ advice to SMEs on how to be sustainable, we can categorise them into two groups. One category highlights “investing in people who have the expertise to prepare the reports on sustainability matters” and “obtaining advise [sic] from qualified external parties. There is like [sic] to be saving in cost and creating [sic] sources of income from such examination of businesses”. This indicates that SMPs are aware of the opportunity that sustainability reporting presents themselves and SMEs. As IFAC (2021) points out, SMPs have the potential to provide a broad range of services, including advisory and preparing reports. Therefore, they must build skills and knowledge and take the initial steps. Obtaining the advice of SMPs is the first step towards sustainability for SMEs. Highlighting the critical role that SMPs play in this sustainability game, as maintained by La Torre et al. (2020), Khoja et al. (2022), and Pizzi et al. (2022). Although SMEs are not exposed to the requirements of capital markets, they also send signals to their stakeholders through sustainability reporting, as legitimacy theory supports (Brammer & Pavelin, 2006), a task in which SMPs must be experts.

SMPs can support SMEs´ sustainable development in different ways, as summarised by EFAA (2021): Advising on sustainable business practices, adopting sustainable business practices, preparing sustainability reports, and providing assurance on sustainability information. In addition, professional accountancy organisations play an essential role because “they have a responsibility to lead, encourage and help SMPs realise their role in supporting the creation of a sustainable EU economy” (EFAA, 2021, p. 1). The other category views are focused on the importance of sustainability and the actions and disclosure to be undertaken by SMEs, for example, as follows:

  • - “Sustainability is the future. Companies must build their pillars, on a sustainable basis, by virtue of which it can actually allow their existence in the future. Each company has to adopt procedures that allow it to feel an impact on a global scale. The well-being of the environment and beings translates into the evolution and well-being of companies as well”.

  • - “Integrated thinking is important to implement within the organisation, which implies a holistic approach as to how value is being created (and also being extracted or destroyed) by the organisation's activities. This means performing a materiality assessment of the full activities in the value chain and analysing where the main societal impacts occur. Based on this materiality assessment, the strategy of the company can define the goals necessary to improve its impacts (and regenerative capabilities). Then, it is important that these goals are fully integrated within the firm's planning and control cycle (internal organisation, risk management and management control). It should also be integrated within the (financial) reporting cycle, meaning sufficient monitoring on progress is possible. The reporting should include the most material topics from the materiality assessment, even where no goals have been defined”.

Only one respondent expresses a sceptical opinion about the sustainability challenge: “The overall concept of “sustainability” has been stretched so much that it may appear extremely vague and potentially meaningless. No company can deliver of [sic] all dimensions of sustainability: This applies to larger firms and even more so to small firms. It is therefore important to focus on the specific dimensions of sustainability performance which are most critical for the future well-being of each organisation. Clearly this may not meet the expectations of “single-issue” stakeholders, but there is no way for firms to make everybody happy”.

4.2 Importance of sustainability/non-financial matters in the future for SMEs

In Table 5, one can see that those matters in the proposed Corporate Sustainability Reporting Directive related to the specificities of SMEs are rated as very important (Table 5). They all obtain a mean rating of at least 4 out of 5, with only one exception: The motivation or incentive to issue non-financial/sustainability information for SMEs (mean: 3.67). However, in one of the open questions, fiscal benefits are mentioned. Perhaps the questionnaire should have distinguished between external incentives and internal motivation, as previous studies have done (Eweje & Gabriel Eweje, 2020; Sánchez-Medina et al., 2015) and considered the distinction between legitimacy theory that seeks legitimacy from stakeholders (Fatma et al., 2014; Zamil et al., 2021) and internal legitimacy, which is born internally (Hillman & Wan, 2005; Hine & Preuss, 2009; Sridhar, 2012).

Table 5 Importance of sustainability/non-financial matters in the future for SMEs
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Respondents consider it more important to have tailor-made European sustainability reporting standards for SMEs (mean: 4.40) as included in the proposal of Corporate Sustainability Reporting Directive and clear advice from SMPs about non-financial/sustainability reporting (mean: 4.40). SMPs are fully aware of SMEs' specificities, which is why they require tailored standards for SMEs, and one crucial factor is the supply chain pressure that SMEs suffer and implies a single solution (Ciliberti et al., 2009). The next most important is the proportionality of the non-financial/sustainability reporting requirements for SMEs bearing in mind their capabilities (mean: 4.33). The ratings afforded clear definitions of both types of materiality indicate support for double materiality, contrary to the priority afforded financial materiality in other studies (Calabrese et al., 2016). Respondents rate tailor-made European sustainability reporting standards for SMEs as more important than ones for assurance.

In this case, no statistically significant relationship exists between the length of experience and the importance given to the various matters. Hence, the length of experience of the respondents has no bearing on their ratings. However, practitioners rate as very important all these questions with a high mean, which shows their self-awareness in practical terms on the spot, in need of training and develo** their work (Zaffiro et al., 2020) (Tables 5 and 6).

Table 6 Importance of sustainability/non-financial reporting issues for SMEs
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According to the future development of non-financial/sustainability reporting for SMEs, respondents were asked about the most decisive factor in the open question 6 questionnaire. One respondent points out the trickle-down effect by saying: “The fact that larger firms are under both formal (Corporate Sustainability Reporting Directive) and substantial pressure to issue sustainability reports is already bringing them to make sure their suppliers are able (or incentivised) to supply suitable information. In Italy, for instance, ACEA, ENI and Leonardo are already taking actions in this respect. At least some SMEs signal that pressure to report on sustainability is increasing, and accordingly express more interest for the entire topic of sustainability reporting”.

Furthermore, another respondent says: “The decisive factor is how the legal requirements for large companies penetrate and rub off on SMEs and whether there will be legal requirements for sustainability reporting for SMEs. It is also possible that there will be a de facto obligation for SMEs to maintain competitiveness”. The trickle-down effect exists in non-financial/sustainability reporting, just as it has been identified with financial reporting (Lang & Martin, 2017) and also checked for SMEs in the sustainability field, such is the case of Ciliberti et al. (2009), Santos (2011) and Zarzycka and Krasodomska (2022). This implies that regardless of the legal scope of the regulations, an indirect effect essentially requires SMEs to disclose this type of information. Regarding legitimacy theory, SMEs are also under pressure to disclose sustainability information, not only externally but also internally (Hillman & Wan, 2005; Hine & Preuss, 2009; Sridhar, 2012).

In develo** sustainability reporting standards for SMEs, it is important to bear in mind their limited resources. As one respondent stresses, “Cost beneficial factor is the one that I consider most important. If SMEs see the benefit in preparing sustainability report and time spent will be limited/minimal, then [sic] SMEs will see a point to apply for voluntary preparation, not just mandatory. SMEs currently are facing an increased volume of statistical reporting that needs to be prepared by SMPs. These statistical reports do not add value to the SMEs as such.” Similarly, another respondent states: “There must be a need or benefit to make sustainability reporting for SMEs” and “Anylising [sic] costs and benefits”.

Moreover, one respondent notes the importance of integrated reporting: “Raising the awareness of various stakeholders on role of sustainability reports, in presenting all the factors that contribute in adding the business value. Improving performance through shifting from short-term shareholder value to a more comprehensive one that better integrates human, social, natural, and financial aspects. Integrating reporting is a solution for companies to report financial and non-financial information”.

4.3 Importance of sustainability/non-financial reporting issues for SMEs

In Table 6, one can see that respondents consider that the most important requirement of non-financial/sustainability reporting comes from the value chain because SMEs have to answer all the pressures as legitimacy theory establishes (Hillman & Wan, 2005; Hine & Preuss, 2009; Sridhar, 2012). Hence, although non-listed SMEs are initially not included in the scope of the proposed Corporate Sustainability Reporting Directive, they will be indirectly required by large companies because they are in their value chain as clients or suppliers, among others. If SMEs are not legally required or required by large companies in their value chain, they do not prepare non-financial/sustainability information because costs exceed benefits (mean: 3.87). Costs exceed benefits because SMEs perceive non-financial/sustainability reporting to be burdensome (mean: 3.80). Motivation support by legitimacy theory (Fatma et al., 2014; Zamil et al., 2021) is not enough to reach a positive result from the cost–benefit assessment as SMEs do not have a narrow relationship with capital markets as large companies (Brammer & Pavelin, 2006; Schiehll & Kolahgar, 2021). Instead, it can be derived from a more considerable internal motivation for SMEs, which is argued as internal legitimacy in an extension of the legitimacy theory (Hillman & Wan, 2005; Hine & Preuss, 2009; Sridhar, 2012). SMEs, however, can still benefit from using sustainability reporting as an internal management tool. SMPs can play an important role in this respect (EFAA, 2021; IFAC, 2021). The next most crucial issue is that sustainability reporting can help to gain access to finance, albeit with a lower rating than the previously mentioned options (mean: 3.67). This means that while reporting costs may exceed the benefits, better access to finance from reporting may result in the benefits exceeding the costs. Although all the issues are rated more significant than 3, the issues rated the lowest in importance are voluntary reporting (mean: 3.4) and the needs of stakeholders (mean: 3.33) as the search for legitimacy from their stakeholders on their practices (Fatma et al., 2014; Zamil et al., 2021).

In this case, there is no statistically significant relationship between the length of experience and the level of importance given to the various issues. Hence, the length of experience of the respondents has no bearing on their ratings. Although sustainability reporting is more usual each time for SMEs and SMPs, implementing sustainability requires resources and knowledge, and in comparison with the financial field, it can still be vague (Mitra & Buzzanell, 2018).

4.4 SMPs best placed to prepare sustainability reports and provide assurance on them

The approach of SMEs and SMPs towards sustainability reporting and assurance still needs to be developed. Nevertheless, it is checked that the role of SMPs is determinant due to their relationships with SMEs (Agostini et al., 2021) and because SMPs are also SMEs. Hence, SMPs are well-placed to prepare sustainability reports and provide assurance. As one can see from Table 7, those professionals considered to be best placed to prepare sustainability reports are sustainability experts (mean: 4.43), followed by certified accountants (mean: 4.20), business advisers/consultants (4.00), then auditors (mean: 3.55), and in last place tax advisers (2.50). Hence, respondents believe that sustainability experts are better qualified for sustainability reporting than qualified accountants.

Table 7 SMPs best placed to prepare sustainability reports
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Given that financial and non-financial reporting are closely connected, and that regulators of and standard setters for financial reporting are likely to be the same will be in charge of non-financial reporting, the role played by accountants is of great importance. Nevertheless, this preference for sustainability experts agrees with the opinion of Clarke & O´Neill (2005, p. 120) when they wrote that “although the accounting profession may attempt to capture community sanction within an environmental context, their knowledge set does not have the depth of technical or scientific environmental knowledge to justify their recognition as the environmental professional”. However, accountants have the potential to make a significant contribution to sustainability since they are best placed to incorporate financial and non-financial information and key performance indicators into traditional accounting control systems (Clarke & O’Neill, 2005). “Finance officers in these SMEs must gain the expertise to help small business clients design and implement sustainability strategies. They should be prepared to help their SME clients improve the efficiency with which they gather, combine, and report their sustainability data. They are in a good position to help their clients define metrics for measuring the effectiveness of their sustainability strategies. Accurate measurement is necessary for the credibility of sustainability reporting and the assurance services needed to add credibility to this information. SMEs should involve finance professionals in develo** strategic roles” (Kimanzi & Gamede, 2020, p. 13). The role of accountants can also be seen as a gatekeeper between the sustainability manager and higher management. However, this is mainly in the case of large companies leading in sustainability reporting (Schaltegger & Zvezdov, 2013). SMPs have a more important role to play with SMEs as they are more closely linked to these enterprises, and these enterprises do not have complex hierarchical structures. The Association of Chartered Certified Accountants recognises this role: “For most small and medium-sized businesses, their accountant is a trusted adviser who can help them navigate a complex landscape while bringing order to records of transactions and processes they may not be able to manage themselves”. In addition, they will support the integration of business strategy and targets on sustainability into business plans (Sage et al., 2021, p. 15).

Moreover, the European Financial Reporting Advisory Group has reshaped its governance to develop European Sustainability Reporting Standards (Gauzès & Board, 2021). One respondent proposes financial advisers positioned to provide a financial and sustainability perspective.

Table 8 reveals that some professionals are better suited to assure others. Assurance is linked to auditing; hence, not surprisingly, auditors are best placed (mean: 4.43), followed by accountants (mean: 4.18). Sustainability assurance is considered a significant opportunity for auditors (ESG assurance an elusive but promising opportunity for auditors—Journal of Accountancy, 2021). The Corporate Sustainability Reporting Directive proposes that assurance has to be provided by an independent expert but not necessarily the auditor. This means accountants play an essential role in ensuring sustainability reports. While assurance is an external guarantee and is highly appreciated by investors, assurance only mitigates information asymmetries when it is provided by accounting professionals providing a “reasonable” opinion (Cuadrado-Ballesteros et al., 2017).

Table 8 SMPs best placed to provide assurance on sustainability reports
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Respondents indicate that assurance can also be provided by a sustainability expert, a business adviser, a consultant, a tax adviser, or a financial adviser. Only the preparer of the sustainability report is barred from assuring it.

In the responses to question 8, we note that one respondent says that “the finance department/accountant/bookkeeper of the SME company would be best placed to align internal management information systems and draft the sustainability report. However, this professional needs the training to fulfil this task”. Hence, the professional in charge of financial information will be responsible for compiling the sustainability information. There is a clear consensus in the views as to the important role of SMPs in develo** the European Sustainability Reporting Standards, especially the SMEs standards, as previous studies have found (Çalişkan, 2014; Junger Da Silva et al., 2020). The core pattern for practitioners who want to be in charge of sustainability reporting or assurance must be to achieve a holistic perspective on management for sustainability (Stephenson et al., 2021).

5 Conclusions

The findings provide valuable new evidence that SMPs will play a key role in enabling the sustainable transition of SMEs through their provision of advisory, accounting, and assurance services. In so doing, this paper fills a gap in the research literature. Moreover, the findings indicate that SMPs stand ready to fulfil this emerging role, which was identified as far back as the 1990s (Wilkin, 1996, p. 217).

The main implication of this study is the significant reskilling of SMPs that likely will be necessary for them to fulfil this potential role properly. In addition, respondents are confident that SMPs can transfer the skills they have acquired through their education and training and experience garnered through providing financial reporting, assurance, and advisory services to sustainability reporting, assurance, and advisory services.

The gap between sustainability services provided and traditional services (related to financial aspects) may be due to the basic understanding of the sustainability of SMPs, as obtained in previous studies such as Kelsall (2015). The conclusions highlight that, in the meantime, large accounting bodies and the Big Four mainly provide these sustainability services. Also, if SMPs have been viewed as trusted business advisers, the more they develop their sustainability skills and knowledge, the more they will reduce their traditional accounting services.

SMPs will likely need to be made aware of, encouraged to adapt, and provided practical support to make this adaptation if they realise this potential. Moreover, they will need someone to represent them and advocate for this role. SMPs will likely rely on their professional accountancy organisations for this support and representation (Ramirez, 2009). This paper confirms that a critical competency in the future will be the ability to see and anticipate trends on the horizon and advise clients on the implications of those trends; the advantage of small practices is close client relationships. As a result, they are well-positioned to identify needs in the sustainable transition and customise services to meet these demands and circumstances (IFAC, 2020).

SMEs and SMPs differ from large companies and their service providers (Ortiz-Martínez et al., 2023). Therefore, factors of motivation that support sustainability reporting according to core theories, such as legitimacy theory (Fatma et al., 2014; Zamil et al., 2021) and the signals sent to the market (Brammer & Pavelin, 2006; Schiehll & Kolahgar, 2021) cannot be enough to obtain a positive cost–benefit assessment.

Therefore, the main contribution of this manuscript is to point out that the goal of sustainability reporting can only be achieved with the SME´s implication, and it also means SMPs implication. Unfortunately, the narrow relationship between SMEs and SMPs is sometimes unknown or not borne in mind, as happens with the effects on the value chain and the “trickle-down” effect. Nevertheless, to cope with the sustainability challenge, the specificities of SMEs and SMPs have to define standards for them, as recommendations or guidelines, to succeed in the goal of sustainability practices and reporting, which is mainly in the hands of the SMPs.

The study´s main weakness is the likelihood of bias in respondents’ views. Respondents, typically SMPs at the thought leading edge of their profession, are ideally placed to appreciate the potential role as they are well-informed on the issues. However, in this study, they are essentially being used as proxies or representatives of the SMPs community, which needs to be better informed on sustainability. Future research might be needed that investigates the views of SMPs more broadly.