Voluntary Sustainability Reporting Standard for EU SMEs (VSME)

What is VSME?

VSME is a simplified voluntary sustainability reporting standard for SMEs is set to be published end of 2024 and drafted in connection with the new EU Corporate Sustainability Reporting Directive (CSRD) aimed at increasing transparency about the impact of businesses on people and the environment.

Who is this standard for?

VSME has been developed for SMEs with less than 250 employees. While the primary focus of this standard is the EU, SMEs from other jurisdictions may also want to adopt it, especially if they are part of the value chain of EU-based corporations subject to CSRD. 

Why is it needed?

The implementation of EU CSRD is expected to see increase in inquiries about their sustainability performance from business partners, lenders and investors. VSME aims to set a minimum level of sustainability reporting to support SMEs with communicating on their progress.

How was it developed?

The standard was developed using existing questionnaires commonly requested by financial institutions when assessing SMEs’ sustainability practices. Its first draft underwent a broad stakeholder consultation in early 2024, which informed the refinements leading to the final version now in effect.

What does it contain?

Basic and a Comprehensive modules including 20 sustainability disclosures in relation to companies performance on Environmental, Social and Governance issues. Depending on their circumstances, companies can determine if they report accordingly to one or both modules.

What are the next steps?

EFRAG is currently engaged in numerous activities to support SMEs with implementation, incl. issuance of additional guidance materials and monitoring emerging data tools and platforms. 

Which guidance materials and tools are already in place?

EFRAG has already published a number a videos in multiple European languages that explain key disclosures in scope of VSME. They also released a VSME Digital Template that supports reporting companies with creation of their sustainability report, in line with VSME.

How was Intently involved?

We participated in the public consultation and the field test together with Lausanne-based SME CompPair Technologies and provided feedback into the current version of the standard. As a member of the VSME Community, we are now providing feedbacks into development of support guides for the prioritized topics within the standard.

Further details:

VSME standard: https://www.efrag.org/sites/default/files/sites/webpublishing/SiteAssets/VSME Standard.pdf

Digital template: https://www.efrag.org/en/vsme-digital-template-and-xbrl-taxonomy

Other tools: https://www.efrag.org/en/smes-and-sustainability-reporting