SME Update

Accountancy Europe co-organises webinar on sustainability disclosures for SMEs

On 19 November, Accountancy Europe organised together with ACCA, the European Association of Cooperative Banks (EACB) and SMEunited a webinar on non-financial information (NFI) disclosures of SMEs.

SMEs are facing the prospect of having to provide NFI even though this is not (yet) demanded by legislation. These NFI requirements will come from their supply chains, banks or possibly as part of public procurement.

The webinar thus brought together the European Commission, MEP Lara Wolters (S&D/Netherlands), Accountancy Europe’s Paul Gisby, SMEunited’s Lux Hendrickx and EACB’s Bouke De Vries to discuss the challenges and opportunities for SMEs and present solutions to help SMEs cope. The webinar was moderated by ACCA’s Aleksandra Zaronina-Kirillova, and can be watched in full here.

European Commission

Commission launches new pact for skills, including upskilling of SMEs

The Pact for Skills, launched on 10 November, promotes joint action to maximise the impact of investing in improving existing skills (upskilling) and training in new skills (reskilling). It calls on industry, employers, social partners, chambers of commerce, public authorities, education and training providers and employment agencies to work together and make a clear commitment to invest in training for all working age people across the Union.

By joining the Pact, stakeholders will gain access to networking, knowledge and resource hubs. The Commission will also offer information and guidance on EU funding and programmes for skills development by offering a single-entry point at EU level. In addition to the funding available under REACT-EU, the European Social Fund Plus and other relevant programmes, up- and reskilling is one of the flagship investment priorities of the Recovery and Resilience Facility worth EUR 672.5 billion. Read more

Commission publishes more details on its upcoming insolvency initiative

The European Commission is planning a new non-bank insolvency initiative for the second quarter of 2022, and has published a roadmap that further explains its objectives.

The Commission’s plan is to go beyond the existing EU insolvency Directive to address notably some of the following dimensions:

• Prerequisites for when insolvency proceedings should be commenced (including a definition of insolvency and provisions on who is entitled to file for insolvency)
• Conditions for determining avoidance actions and effects of claw-back rights
• Directors’ duties related to handling imminent/actual insolvency proceedings
• Position of secured creditors in insolvency
• Asset tracing

The Commission is considering two options: either issuing a non-binding recommendation, or a legally binding EU Directive. A public consultation is expected in the next few weeks. Read more

Commission disburses €14 billion under SURE instrument to nine Member States

According to the Commission announcement, dated 17 November, Croatia has received EUR 510 million, Cyprus EUR 250 million, Greece EUR 2 billion, Italy an additional EUR 6.5 billion, Latvia EUR 120 million, Lithuania EUR 300 million, Malta EUR 120 million, Slovenia EUR 200 million and Spain an additional EUR 4 billion in SURE support.

The support consists of loans granted on favourable terms, to help cover countries’ costs related to the financing of national short-time work schemes, and other similar measures put in place as a response to COVID, including for the self-employed.

Accountancy Europe believes that such support will help many SMEs retain their employers and skills in difficult COVID times. Read more

Commission publishes IP Action Plan with key focus on SMEs

The Action Plan is a legally non-binding document in which the Commission sets out its plans to upgrade the intellectual property (IP) system in Europe, promote its smarter use, ensure better enforcement and promote fair play globally for IP.

Crucially for small businesses, the Action Plan wants to improve SME access to IP. It states that only 9% of EU SMEs have registered IP rights. The planned measures for SMEs include:

• Offering financial support or IP vouchers for SMEs impacted by the COVID
• Providing advice for SMEs on IP
• Make it easier for SMEs to leverage their IP when trying to get access to finance, as part of which the Commission will discuss with the “financial community” how IP valuation could help

Read more

European Parliament

European Parliament adopts position on industrial strategy

On 25 November, the European Parliament adopted by a margin of 486 in favour, 109 against, and 102 abstentions a legally non-binding report on EU industrial strategy.

Several of the Parliament’s recommendations concern SMEs. For example, the Parliament calls for ad hoc support measures to help SMEs with sustainable digital transition. Possibilities include an SME voucher programme to support SMEs’ efforts, including to upgrade obsolete equipment, enhance knowledge transfer, identify most effective uses of technologies, and upskill the workforce. On environmental transition, the support should be aimed at environmentally sustainable business models, circular economy approaches, and energy and resource efficiency. Read more

WEF: how COVID is impacting Europe’s SMEs?

New research by McKinsey shows the devastating effect COVID is having on Europe’s SMEs. Due to the pandemic, one fifth of businesses now expect to default on loans and lay off staff. If revenues were to remain steady, 55% of SMEs could shut down by September 2021, a figure that rises to 77% if revenues worsen, the study shows. Read more

EFRAG publishes interim report on NFI, calls for a tailored approach for SMEs

On 13 November, the European Financial Reporting Advisory Group (EFRAG) published initial results of its work to come up with technical advice to assist the European Commission in its revision of the non-financial reporting Directive (NFRD).

The Commission’s revision, expected around March 2021, might include some SMEs in the scope of mandatory non-financial information (NFI) disclosures. As such, EFRAG is also reflecting on ways to make NFI work for SMEs.

In its interim report, EFRAG laments that even in the absence of mandatory requirements, SMEs may face NFI requirements when they are in the supply and value chains of companies subject to mandatory NFI reporting. A tailored approach towards SMEs is needed, the report underlines. Read more