Sustainability Reporting as an Instrument of Organizational Security and Environmental Credibility
Purpose: The aim of this article is to analyze the role of sustainability reporting as an instrument supporting financial security and building the environmental credibility of small and medium-sized enterprises (SMEs). The study attempts to identify the significance of sustainability reporting in enhancing corporate transparency, reducing reputational risk, preventing greenwashing practices, and strengthening relationships with stakeholders. Research methodology: The study employs a critical literature review and an analysis of legal acts and regulatory documents concerning sustainability reporting, ESG issues, and the functioning of the SME sector. Particular attention is given to the assumptions of the Voluntary Sustainability Reporting Standard for SMEs (VSME) and its significance for business practice. Findings: The analysis indicates that sustainability reporting can serve as an important tool for building corporate credibility, increasing transparency, and reducing reputational risk. Reliable disclosure of environmental information may also mitigate the risk of greenwashing by providing stakeholders with credible and comparable data regarding a company’s environmental impact. Furthermore, sustainability reporting may contribute to strengthening a company’s financial security by enhancing the trust of business partners, investors, and financial institutions. Originality/value: The value of the article lies in presenting sustainability reporting not only as a tool for implementing ESG principles but also as an instrument supporting financial security, building credibility, and reducing the risk of greenwashing in small and medium-sized enterprises. The study highlights the practical benefits of implementing sustainability reporting within the SME sector in the context of growing stakeholder expectations and evolving regulatory requirements.