Beyond regulatory pressures: exploring the drivers of CSR and sustainability reporting in Portuguese SMEs

Purpose This study aims to explore the factors influencing Portuguese small and medium-sized enterprises’ (SMEs) perceptions of corporate sustainability reporting and examines how these perceptions relate to the adoption of corporate social responsibility (CSR) practices. Design/methodology/approach Guided by institutional, stakeholder, signalling and legitimacy theories, a structural model is developed and tested using survey data collected from 422 accounting and auditing professionals working in Portuguese SMEs. Structural equation modelling is used to analyse the relationships among key constructs, with firm size tested as a moderating variable. Findings The results show that regulatory pressures, social expectations and corporate integrity significantly influence the perceived importance of sustainability reporting. In turn, this perception positively affects CSR practices. Firm size moderates these relationships, with medium-sized firms showing greater sensitivity to regulatory and ethical drivers, while smaller firms place more emphasis on reporting perception as a strategic signal. Research limitations/implications The findings can inform the development of policies and initiatives tailored to support SMEs in adopting sustainability reporting and CSR practices. SMEs can use the insights to enhance their sustainability strategies, build relationships with stakeholders and improve their reputation. However, this study is limited to Portuguese SMEs and relies on cross-sectional survey data, which may not fully capture longitudinal CSR behaviours. Future research could extend the analysis to other countries, apply mixed methods or explore industry-specific differences through qualitative inquiry. Practical implications The findings offer actionable insights for policymakers and SME managers. Policymakers can design targeted initiatives to support voluntary CSR reporting, while SME leaders can leverage ethical culture and reporting transparency to strengthen stakeholder trust and competitive positioning. Social implications By identifying how SMEs engage with sustainability reporting and CSR, the study highlights the role of smaller firms in advancing broader societal goals related to transparency, accountability and sustainable development. Originality/value This study contributes to the SME sustainability literature by integrating multiple theoretical perspectives into a single empirical model. It introduces the perceived importance of reporting as a mediating construct and demonstrates how firm size shapes the influence of institutional and ethical drivers on CSR behaviour.