MEASURING ESG READINESS IN EUROPEAN ENVIRONMENTALLY SENSITIVE SMES THROUGH A CUSTOM-TRAINED LARGE LANGUAGE MODEL

THIS STUDY DEVELOPS A THEORETICAL AND OPERATIONAL FRAMEWORK FOR ASSESSING ENVIRONMENTAL SOCIAL GOVERNANCE (ESG) READINESS IN EUROPEAN SMALL AND MEDIUM-SIZED ENTERPRISES (SMES). ESG READINESS IS CONCEPTUALISED AS THE COMBINATION OF ORGANISATIONAL RESOURCES, STRUCTURES, CULTURAL ORIENTATIONS, AND EXTERNAL PRESSURES THAT ENABLE THE EFFECTIVE IMPLEMENTATION OF SUSTAINABILITY PRACTICES BEYOND MERE REPORTING. GROUNDED IN ORGANISATIONAL READINESS FOR CHANGE, INSTITUTIONAL THEORY, AND LEGITIMACY THEORY, THE FRAMEWORK EXAMINES THREE CORE DIMENSIONS: ORGANISATIONAL CAPACITY, ENVIRONMENTAL PRESSURE, AND ORGANISATIONAL CULTURE. THE STUDY FOCUSES ON 197 UNLISTED SMES, NOT SUBJECT TO MANDATORY SUSTAINABILITY DISCLOSURE, TO ADDRESS THE FOLLOWING RESEARCH QUESTIONS: TO WHAT EXTENT DO UNLISTED EUROPEAN SMES THAT VOLUNTARILY ADOPT SUSTAINABILITY REPORTING STANDARDS DEMONSTRATE ADEQUATE ESG READINESS TO IMPLEMENT THE REPORTING PROCESS EFFECTIVELY? HOW DOES ESG READINESS SHAPE THE QUALITY, DEPTH, AND INTERNAL COHERENCE OF SMES’ SUSTAINABILITY DISCLOSURE? THE GOAL OF THIS STUDY IS TO IDENTIFY THE ENABLING FACTORS THAT SUPPORT GENUINE ESG ENGAGEMENT AND TO DISTINGUISH SUBSTANTIVE PRACTICES FROM SYMBOLIC COMPLIANCE BY DEVELOPING AND TRAINING A LARGE LANGUAGE MODEL (LLM).