Non-financial reporting and SMEs: A systematic review, research agenda, and novel conceptualization

Policymakers, academics, and practitioners are increasingly discussing non-financial reporting (NFR) initiatives, i.e., reporting initiatives that are related to environmental and social matters. The implementation of NFR initiatives in the context of small and medium-sized enterprises (SMEs) is a key topic. Based on a systematic literature review, this article first synthesizes what we know about the mechanisms underlying NFR initiatives implemented by SMEs. A thematic analysis led to the identification and examination of drivers, enabling factors, and challenges for NFR initiatives. Relevant drivers include legitimacy-based motivations, competitive advantage, and stakeholder engagement. Enabling factors include specific guidelines and tools for NFR. Lack of capabilities and lack of standardization are significant challenges. Second, drawing on the thematic analysis and on what we do not know about NFR in the context of SMEs, a novel conceptualization of NFR as a process characterized by three main phases is presented. Last, this article suggests future research opportunities.