The Role of Small and Medium Practices in the Sustainability Reporting of Italian Small and Medium Enterprises

Abstract

Small and medium enterprises (SMEs) have a prominent role in both the European and the Italian economies, but their approach towards corporate social responsibility (CSR) and sustainability is still underdeveloped. The reasons are mainly related to perceived low economic returns, lack of enforced compliance of the legislation, limited financial and practical support. In overcoming these problems, the role of small and medium practices (SMPs) can be determinant due to the relationship between SMEs and their (not only accounting) consultants. This chapter focuses on SMPs' role in promoting SMEs' initiatives and also considers the academic debate about their sustainability reporting. The investigation of this stream of research and the results of a web survey (involving SMPs in the Northeast of Italy) emphasize how SMPs can support SMEs' sustainable practices and reporting.

The business case for sustainability reporting in SMEs: consultants' and academics' perceptions

“…The most notable difference between the groups is that academics consider the “economic cost” criterion to be the most important determinant of whether or not to implement SR in SMEs, whereas it is not one of the most relevant criteria for consultants. A potential explanation of why academics view “economic cost” as a critical factor is the fact that previous literature reports that costs related to the implementation of the SR guideline are recovered in the medium or long term (Carroll & Shabana, 2010; McWilliams & Siegel, 2001), and SMEs are generally trying to survive in the short term (Agostini et al, 2018; Armitage & Marston, 2008). These interesting findings indicate that academics view the “economic cost” as preventing SMEs from achieving the long‐term return to the firm yielded by SR. A similar result was found by Adhariani and Villiers (2019) for the case of integrated reporting (IR): academics perceived costs as outweighing the perceived benefits.…”

“…Second, there are all the costs associated with “producing the report and external disclosure of the information”, such as printing reports and/or creating online reports (Dwyer, 2005; Sprinkle & Maines, 2010). A third cost is related to the need to “monitor new information and information control”; for example, data collection systems may need to be implemented to manage different information sources (Agostini et al, 2018; Armitage & Marston, 2008; Dwyer, 2005). Del Baldo (2017, p. 520) refers to the creation of a coordination manager (CSR Manager), “responsible for dealing with critical aspects concerning both the operative and relational profiles of sustainability and internal/external corporate responsibility” as one of the main obstacles to reporting.…”

The implementation of sustainability reporting in a small and medium enterprise and the emergence of integrated thinking

“…Nevertheless, there is still much to learn about the processes and dynamics of implementing SER within an organization (O’Dwyer and Unerman, 2016), especially in the case of SMEs, due in part to the relatively recent integration of sustainability in the accounting practices of SMEs (Agostini et al , 2018; Arena and Azzone, 2012; Del Baldo, 2017; Perrini, 2006; Russo and Tencati, 2009). In this regard, Massa et al (2015) studied “the initial stages of the development of the sustainability report” (p. 62) and the consequences related to organizational changes within an Italian SME.…”

“…The report was prepared in 2016 and published in 2017. It was a very important event, considering the low levels of SER implementation among SMEs in comparison with larger companies (Agostini et al , 2018). In October 2018, the company was completely acquitted of all previous charges.…”

“…In doing so, hitherto under-explored knowledge will be extended on both the processes and the dynamics related to the organizational implementation of SER (O’Dwyer and Unerman, 2016) within an organizational strategy. At the same time, the paper will provide insight into the first stages of institutionalization of the still embryonic SER practice for SMEs (Agostini et al , 2018; Dincer and Dincer, 2010; Vo, 2011). The literature, is relatively silent on the processes for sustainability integration within SMEs, with some exceptions such as Massa et al (2015), a gap which this study aims to fill.…”