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In 2014, almost 99.8% of all European enterprises were small and medium-sized enterprises (SMEs). These SMEs employed around 87 million people and contributed 57.6% of the overall European economic value added (EU Commission website, 2016). At the same time, SMEs are responsible for up to 70% of the total environmental pollution generated on the planet (Eurobarometer, 2012). These facts have led to a growing awareness of SMEs’ significant impact in financial terms, but also in terms of their global natural environment and societal impacts. Moreover, the entire planetary economy revolves around the contributions of SMEs.
The definition of what constitutes an SME varies among countries, and within the same country over time (Ferenhof, Vignochi, Selig, Lezana, & Campos, 2014). From among the available definitions, the European Commission has adopted Recommendation 2003/361/EC, which defines an SME according to three criteria: staff headcount, annual turnover and annual balance sheet. In particular, an SME is identified as an enterprise that employs fewer than 250 employees. From the financial perspective two criteria are added: an annual turnover not exceeding 50 million euros, and an annual balance sheet total not exceeding 43 million euros. In addition, an SME must be an autonomous enterprise, that is, an independent entity. An independent entity is a firm without governance links between the firm itself and other companies. Meaning, it does not have an ownership stake in other enterprises, and no other enterprises have a relevant stake in it. If there are any cross-ownership linkages, they are not able to exert a relevant influence on the governance structure of the SME.
As stated by the Global Reporting Initiative (GRI) and the United Nations Environment Program (UNEP), multinational companies, because of economic globalization, engage SMEs in their supply chain. These SME suppliers are actually often responsible for producing the bulk of the components and services sold under the multinational's brands (GRI and UNEP, 2008). Nowadays most of the economic, environmental and social impacts of a multinational business occur through this long supply chain, and most of these impacts are then obviously due to SMEs’ behaviors (Carbone et al., 2012).
The retrieval of supply chain sustainability data is often a costly and difficult process because of the lack of systematization of data collection and reporting within SMEs. As pointed out by Vázquez-Carrasco and López-Pérez (2012), although there is a growing tendency to focus on Corporate Social Responsibility (CSR) as part of the self-regulatory strategies, tools, and practices of small business environments, there are few studies critical of the tools aimed at Small Business Social Responsibility (SBSR), and fewer still on the issues of understanding, measuring, improving and reporting sustainability performances at the SME micro-scale.
The purpose of this research is to add a contribution to SBSR studies by showing how a tendentious global standardization practice arises in SMEs facing sustainability reporting because of an earlier internal commitment to sustainability. The methodology applied in this paper is Principal Component Analysis (PCA). PCA is a statistical method used to analyse the interrelationships between a large number of variables. It seeks to explain these variables in terms of a smaller number of variables, called principal components, with a minimum loss of information.