The DEI4SME team and organisers of the students’ hackathon in Kaunas, Lithuania, are happy to welcome Ms Daiva Dėdinienė, a Sustainability Expert/Sustainability Team Lead at Audifina, Independent Board Member of Lithuanian Responsible Business Association and EFRAG DRCG Expert. In her practice, Daiva not only conducted activities related to the compliance of financial statements with International Accounting Standards, licensed newly established collective investment entities, and implemented European Single Electronic Format (ESEF) requirements in Lithuania, but she also actively participated in international working groups on financial and sustainability information supervision at ESMA (European Securities and Markets Authority), as an expert with extensive experience in ESEF inline XBRL reporting and sustainability oversight. In March 2023, Daiva was elected as a member of the EFRAG DRCF (Digital Reporting Consultative Forum), where active discussions and proposals for the newly developed sustainability (ESG) taxonomy are being presented.
Interviewer: Dear Daiva, could you tell us about your professional background and how you became involved in the sustainability topic, and/or field of diversity, equity, and inclusion (DEI) management?
Daiva: I’m a member of the EFRAG (European Financial Reporting Advisory Group) Digital Reporting Consultative Forum and Expert, Sustainability Team Leader at Audifina, with over 15 years of experience in the field of financial and listed company information disclosure supervision. CSRD transposition to the national legislation made some challenges to the member states. I wanted to help, propose the best solutions, so I applied and was elected as an Independent Board member at the Lithuanian Responsible Business Association (LAVA).
Interviewer: What is your current role, and how does it relate to DEI management and compliance within SMEs?
Daiva: As a sustainability expert, I help companies to review their business processes and make sustainable decisions. Together with my team, we help companies (including SMEs) to integrate DEI management into their broader sustainability strategies. DEI is a key component of social sustainability, which emphasizes fairness, inclusion, and equal opportunities. As SMEs face growing stakeholder expectations, the role of sustainability experts in fostering both environmental and social responsibility—including DEI—has become more crucial than ever. The intersection of these two areas is not just about compliance; it’s about creating businesses that are innovative and prepared for the future.
Interviewer: Are there any specific experiences or projects in your career that have significantly shaped your understanding of DEI in the context of SMEs?
Daiva: SMEs can’t enter into new markets, get access to green financing or attract new investors without proper sustainability strategies. It’s becoming a necessary issue in their daily life business.
Interviewer: In simple terms, how would you define Diversity, Equity, and Inclusion (DEI) in the context of small and medium-sized enterprises in Europe?
Daiva: Unless there are no detailed requirements in the context of small and medium-sized enterprises (SMEs) in Europe, Diversity, Equity, and Inclusion (DEI) refers to the practices and policies that ensure diverse representation, fair treatment, and the creation of inclusive environments for all employees, regardless of their gender, ethnicity, age, disability, sexual orientation, or other identity markers.
Interviewer: What is the current situation?
Daiva: The implementation of DEI practices in SMEs in Europe is often at different stages depending on the country, industry, and size of the business. Overall, SMEs tend to lag behind larger corporations when it comes to formal DEI strategies.
Interviewer: Why do DEI management is important for SMEs?
Daiva: In my opinion, DEI management is not just a “nice-to-have” for small and medium-sized enterprises in Europe—it's a critical component of sustainable business practice. SMEs that embrace diversity, equity, and inclusion will be better positioned to attract talent, drive innovation, comply with legal frameworks, and enhance their overall business performance. Even for businesses with limited resources, there are scalable ways to implement DEI initiatives that can have a significant positive impact over time.
Interviewer: How does the Corporate Sustainability Reporting Directive (CSRD) influence SMEs regarding their DEI practices and reporting? How does that influence the situation of marginalised groups?
Daiva: The first answer would be – there is no such requirement or influence from the CSRD. 😊 Nevertheless, we shouldn’t forget about the value chain. So, the CSRD influences SMEs by indirectly encouraging them to focus on DEI practices and social sustainability - even if they are not directly obligated to comply with its reporting requirements. I guess in the future, SMEs will feel more and more pressure from stakeholders - customers, suppliers, investors, and the public - to improve their DEI efforts, especially in areas such as labor practices, diversity in the workforce, pay equity, and human rights.
Interviewer: What are some of the most significant challenges SMEs will face in complying with these directives?
Daiva: Which directives? CSRD is not applicable to SMEs yet. Nevertheless, I would call the biggest challenge for all entities is a reliable data. Changing mindset is also necessary. We should stop thinking about sustainability as a compliance exercise. We should find ways how to use less resources and make a more profitable and sustainable product.
Interviewer: How do you see the role of the European Financial Reporting Advisory Group (EFRAG) in helping SMEs track and report on DEI metrics? What specific guidelines do you think are most beneficial?
Daiva: EFRAG SRB has just approved the Voluntary Sustainability Standards for non-listed SMEs (VSME ESRS). Hopefully, they will reduce burden and facilitate SME’s access to sustainable finance.
Interviewer: In your experience, what are the common barriers SMEs encounter when trying to align their DEI initiatives with regulatory requirements?
Daiva: The barriers include limited resources, a lack of awareness or expertise in DEI and sustainability regulations, resistance to change within organizational culture, and difficulties in collecting and analysing data…
Interviewer: What support or resources do you think are necessary for SMEs to improve their DEI management in line with EU regulations?
Daiva: Maybe strategic planning and seeking external support (e.g., consultants, HR platforms, legal advisors) to better understand and implement DEI best practices in a compliant and effective manner.
Interviewer: What trends do you foresee in DEI management for SMEs over the next few years, especially concerning evolving EU regulations?
Daiva: As DEI becomes an increasingly integral part of social sustainability, I think, SMEs that can overcome these barriers are likely to gain long-term benefits in terms of employee satisfaction, brand reputation, and regulatory compliance.
Interviewer: What advice would you give to SMEs looking to enhance their DEI practices in light of current and upcoming European regulations?
Daiva: Start thinking about tomorrow if you want to succeed. There is no way to survive if you look back; try to be innovative.
Interviewer: Are there any areas within DEI management and regulation that you believe require further research or exploration?
Daiva: Sorry, no idea… ☹
Interviewer: What would you like to wish for the students participating in the DEI4SME hackathon?
Daiva: Don’t be afraid of challenges, change your mindset and stop thinking that sustainability can’t be profitable. Circular economy, waste management, creation products and services of better value can increase profitability even in a short time horizon.
Interviewer: Thank you for an interesting conversation!
The European Financial Reporting Advisory Group (EFRAG) is an independent organization established to provide technical expertise and input on financial reporting matters to the European Commission. Its role includes advising on the adoption of International Financial Reporting Standards (IFRS) within the EU and addressing sustainability reporting standards under the EU's Corporate Sustainability Reporting Directive (CSRD). Digital Reporting Consultative Group (DRCG) is a specialized subgroup within EFRAG that focuses on digital aspects of financial and sustainability reporting. The EFRAG DRCG is crucial in ensuring that reporting frameworks keep pace with the growing demand for digitalization in financial and sustainability reporting. Its work supports the EU's goals of improved transparency, accountability, and data usability in corporate disclosures.