The European Commission has adopted a Voluntary Sustainability Reporting Standard (VSME) to help non-listed SMEs disclose ESG information in a simple and flexible way. The standard aims to ease administrative burdens, support access to sustainable finance, and improve value chain transparency. It is accompanied by recommendations to ensure consistent, voluntary uptake across stakeholders.
On July 30, 2024, he European Commission officially adopted EFRAG’s Voluntary Sustainability Reporting Standard for non-listed Micro, Small, and Medium-sized Enterprises (VSME) as a Recommendation. Designed for companies with fewer than 250 employees, the VSME Standard delivers a simple, proportionate, and practical framework for sustainability reporting. It helps SMEs:
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Respond to growing data requests from banks, investors, and large clients
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Improve access to finance through better ESG transparency
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Manage sustainability risks and opportunities effectively
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Contribute to a more sustainable and inclusive economy
With two tailored modules (Basic & Comprehensive), no mandatory materiality assessment, and ready-to-use digital tools and templates, the VSME standard is built for real-world usability and flexibility.
Why It Matters for SMEs
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Access to finance: Transparent ESG information enhances creditworthiness and investor trust.
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Ease of use: SMEs can use the full standard or selected parts, depending on their context.
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Value chain readiness: Helps SMEs respond to ESG data requests from CSRD-reporting clients.
Key Recommendations from the Commission
From the Staff Working Document:
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Do not impose the VSME Standard contractually in B2B relationships.
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Buyers, investors, and banks should accept reports using the VSME standard rather than requiring bespoke templates.
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National authorities and business support organisations should promote the standard, provide guidance, and develop digital tools.
From Annex 2: Roles and Responsibilities:
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Large companies should accept ESG data disclosed using the VSME Standard and avoid duplicate or custom requests.
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Banks and investors should integrate the standard into ESG risk assessments and SME onboarding processes.
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Member States are encouraged to raise awareness, offer technical support, and consider financial incentives for SME reporters.
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Business associations should provide training, tools, and outreach to encourage uptake.
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Software vendors should incorporate the standard into digital tools for easy ESG data reporting and reuse.
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All stakeholders should avoid fragmentation by aligning ESG data requests with the VSME framework.
Read more at:
Commission announcement (incl. Annexes)
Download the official VSME Standard (EFRAG):
https://www.efrag.org/sites/default/files/sites/webpublishing/SiteAssets/VSME%20Standard.pdf
Access the standard, explainer videos, digital templates, and guidance on the official EFRAG VSME webpage: