What is VSME?

The VSME (Voluntary Sustainability Reporting Standard for non-listed SMEs) is a voluntary sustainability reporting framework connected to the European Union’s policy framework, developed by EFRAG for non-listed small and medium-sized enterprises. The objective of the standard is to enable SMEs to provide ESG and sustainability-related information to business partners, financiers and clients in a simpler and more consistent manner.

The VSME is based on the logic of the ESRS framework, while applying significantly simplified disclosure requirements. It can primarily provide practical support for companies that operate as suppliers to large corporations or need to provide ESG information due to financing, tendering or business partner expectations.

What does VSME include?

The standard supports disclosures related to sustainability and corporate governance topics. Companies may provide information on, among others:

• energy consumption and environmental impacts,
• workforce and workplace-related data,
• business ethics and corporate governance practices,
• key ESG risks and objectives.

The VSME has a modular structure. Companies with simpler operations may prepare reports containing basic information, while organisations with more advanced ESG reporting capabilities may disclose more detailed sustainability information.

Why is VSME important?

Demand for ESG-related information is increasing rapidly across supply chains and financial markets. More and more large companies request sustainability-related data from suppliers in order to fulfil their own CSRD and ESRS obligations. The VSME provides a more standardised and manageable framework for smaller businesses in this area.

The application of the standard may help companies meet market expectations, manage ESG risks more consciously and strengthen business relationships. For many organisations, VSME may also serve as a preparatory step towards future sustainability reporting requirements.

Frequently asked questions

Is the application of VSME mandatory?

VSME is currently a voluntary standard. At the same time, the growing demand for ESG information may make its application a practical expectation for an increasing number of businesses.

What is the relationship between VSME and ESRS?

VSME is a simplified sustainability reporting framework for SMEs built on the logic of ESRS. ESRS is primarily a mandatory reporting framework applicable to larger companies.

Who can benefit from VSME?

VSME may be particularly relevant for small and medium-sized enterprises that operate as suppliers to large companies, receive ESG-related information requests, or face sustainability expectations from financing institutions and business partners.

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