VSME Standard
The VSME Standard is a voluntary, heavily simplified sustainability reporting standard developed by EFRAG for non-listed small and medium-sized enterprises.
VSME stands for "Voluntary Sustainability Reporting Standard for non-listed Micro-, Small- and Medium-sized Enterprises". EFRAG finalised the standard in December 2024 and handed it to the European Commission. It is aimed explicitly at SMEs that fall outside the CSRD reporting obligation but still want or need to provide sustainability information in a structured way. Unlike the ESRS, the VSME is not a binding legal act but a voluntary framework, which the Commission took up in 2025 through a recommendation on voluntary sustainability reporting by non-listed SMEs.
The standard is modular. The Basic Module (B1 to B11) covers the essentials in a few dozen data points: basis for preparation, policies and management practices, energy consumption and Scope 1 and Scope 2 greenhouse gas emissions, pollution, biodiversity, water, resource use and circular economy, workforce metrics on health and safety, remuneration and training, plus disclosures on corruption and bribery cases. The optional Comprehensive Module (C1 to C9) adds business model and strategy, climate targets and transition plan, physical and transition climate risks, human rights policies and incidents, and gender diversity in the governance body, among others. The VSME does not require a full double materiality assessment; disclosures may be omitted on an "if applicable" basis.
In practice the VSME matters above all as a shield in the value chain. Reporting corporates, banks and insurers request ESG data from their suppliers, and the VSME is intended to cap the scope of those requests. In the Omnibus package of February 2025 the Commission proposed a corresponding value-chain cap benchmarked against the VSME. The scope, thresholds and deadlines of the CSRD have been postponed and reshaped several times through the "stop the clock" Directive (EU) 2025/794 and the subsequent Omnibus negotiations, so the final shape should be verified case by case rather than assumed to be settled. What is undisputed is that a VSME report is not subject to any external assurance requirement and involves far fewer data points than a full ESRS report.
Legal Basis
VSME – Voluntary Sustainability Reporting Standard for non-listed SMEs (EFRAG, December 2024); European Commission recommendation (2025) on voluntary sustainability reporting by non-listed SMEs; related to Directive (EU) 2022/2464 (CSRD) and Directive (EU) 2025/794 ("stop the clock")
Practical Example
An automotive supplier with 180 employees receives three different ESG questionnaires from two major customers and its principal bank, running to several hundred questions in total. Instead of answering each one separately, the sustainability manager decides to produce a VSME report based on the Basic Module: she collects energy consumption and Scope 1 and Scope 2 emissions from meter and vehicle fleet data, adds workforce and occupational safety metrics from HR, and documents the policies already in place. She provides the report to every requester as a single, consistent data set and points to the value-chain principle that information going beyond the VSME will only be supplied after individual agreement. The metrics she has gathered also become the baseline for her first reduction targets.