Assessing the readiness for change of Belgian LSMEs in terms of up-to-date non-financial information disclosure. Analysis of the BEL Small Index (through the Compliance Index) in a coercive framework

Details

Supervisors

Desmet, Carlos

Faculty

Louvain School of Management

Degree label

Master [120] : ingénieur de gestion, à finalité spécialisée

Abstract

The Corporate Sustainability Reporting Directive (CSRD) has led to a growing emphasis on the requirement that firms disclose non-financial information within the European Union’s regulatory environment. The present master’s thesis assesses the preparation of listed small and medium-sized enterprises (LSMEs) in Belgium to comply with the European Sustainability Reporting Standards (ESRS). The research uses a Compliance Index (CI) to analyze the 2023 annual reports of 22 firms constituting the BEL Small Index. By using this tool, it enables to evaluate how well the ESRS criteria are being followed and reported across Environmental, Social, and Governance (ESG) aspects. Findings show a substantial preparation gap, with the majority of businesses receiving scores lower than 0,50, especially in areas like pollution. In order to increase compliance, this thesis suggests proactive ESRS involvement, succinct and targeted reporting, specific trainings for reporting teams, and improved pollution and workforce disclosures. By implementing these initiatives, Belgian LSMEs will be able to improve their readiness for change and comply with regulations on time. In sum, this study offers crucial perspectives for businesses, decision-makers, and researchers, demonstrating the benefits of early ESRS implementation in promoting corporate accountability and transparency.