Small and Medium-Sized Enterprises (SMEs) play a crucial role in the European economy, but assessing their performance remains a complex challenge. Conventional evaluation methods frequently neglect non-financial aspects such as Environmental, Social, and Governance (ESG) criteria, which are becoming increasingly important for accessing financing and ensuring long-term competitiveness. 

This policy brief presents key insights from the study “An enhanced simulationbased approach for multicriteria evaluation of SMEs’ performance”, by S. Angilella, M. Doumpos, M.R. Pappalardo, and C. Zopounidis. The study introduces an advanced methodology that combines Multicriteria Decision Analysis (MCDA) and Data Envelopment Analysis (DEA) to provide a more comprehensive assessment of SME performance. 

By incorporating skewness and kurtosis into the evaluation process, this approach offers deeper insights into the performance distributions of composite indicators. Using data from European SMEs between 2018 and 2022, this study highlights significant ranking discrepancies between the proposed model and the earlier methodology of Angilella et al. (2024). 

This brief summarizes the proposed methodology, key findings, and policy recommendations to improve sustainability reporting and performance assessment for SMEs.