The Voluntary Sustainability Reporting Standard for SMEs (VSME) is a new European standard developed specifically for SMEs. This voluntary standard helps SMEs report on their sustainability performance in a structured way. But what exactly is the VSME, why was it developed and what does it mean for your business? In this article, we answer these questions.
What is the VSME?
The Voluntary Sustainability Reporting Standard for SMEs (VSME) is a voluntary sustainability reporting standard developed specifically for unlisted micro, small and medium-sized enterprises. The standard was prepared by EFRAG, the European Financial Reporting Advisory Group, and published in December 2024.
The VSME is aligned with the European Sustainability Reporting Standards (ESRS), which large companies must use for their reporting under the Corporate Sustainability Reporting Directive(CSRD) on topics such as climate, environment and human rights. The major difference is that the VSME is adapted to the needs and capabilities of SMEs, with less extensive reporting requirements proportional to the size of the company.
Why was the VSME developed?
The VSME was developed to achieve four main goals:
- Supporting information requests from the supply chain: Large companies covered by the CSRD will increasingly request sustainability information from their suppliers. The VSME provides SMEs with a practical framework for fulfilling these requests.
- Better access to finance: Banks and investors are increasingly asking for ESG (Environmental, Social, Governance) information. The VSME allows you to provide this information in a standardized way.
- Improving sustainability performance: The VSME helps entrepreneurs systematically address their sustainability challenges, contributing to improved performance and resilience in the short and long term.
- Contribution to a more sustainable economy: By engaging SMEs in sustainability reporting, the VSME contributes to the European transition to a more sustainable and inclusive economy.
Who is the VSME for?
The VSME is specifically designed for unlisted companies outside the mandatory scope of the CSRD. These are companies that meet the definition of micro, small and medium-sized enterprises according to European Directive 2013/34/EU:
| Micro | Small | Medium | |
| Balance sheet total | < €450.000 | < €5 million | < €25 million |
| Net sales | < €900.000 | < €10 million | < €50 million |
| Number of employees | < 10 | < 50 | < 250 |
A company falls into the relevant category if it meets at least 2 of the 3 criteria listed.
How is the VSME structured?
The VSME consists of two modules that companies can use to prepare their sustainability report:
1. Basic module
The Basic Module is the starting point for all SMEs. Here you report only on essential information that is often already available in your records: energy consumption, waste disposal, personnel data and safety measures. This module is specifically designed for micro-enterprises but is the basis for all VSME reporting.
2. Extended module
The Extended module is for companies that want to do more with sustainability or are asked to do so by customers or financiers. This module builds on the Basic module and adds strategic elements, such as climate goals and human rights policies.
You can start with the Basic Module and expand later, or focus on completing only those parts relevant to your business. Empact can help you make the right choices for your specific situation.
What are the benefits of the VSME for SME entrepreneurs?
Although the VSME is voluntary, this standard offers several benefits to SME entrepreneurs:
- Leading Edge: You are prepared for information requests from large companies covered by the CSRD.
- Better access to finance: Being transparent about your sustainability performance makes you more attractive to banks and investors.
- Competitive advantage: Sustainability can be a differentiating factor with customers, partners and in tenders.
- Direction and structure: The VSME provides a framework for thinking about long-term value creation in a structured way.
- Risk management: You gain early insight into sustainability risks, which increases your resilience.
- Incentive for innovation: The process encourages more efficient, forward-looking business.
Getting started with the VSME
As an SME entrepreneur, do you also want to be at the forefront of sustainability? Empact helps you translate complex reporting requirements into practical steps that fit your business. Our experts will guide you in creating efficient VSME reporting that meets the demands of your supply chain partners. From simple basic guidance to strategic sustainability advice, together we ensure that you not only meet obligations, but your company is ready for the future.
Learn more about our VSME approach or contact us directly to discover how you too will soon be leading the way toward the future.