EFRAG has published its first sustainability report using the VSME standard, demonstrating practical implementation of simplified ESG reporting. The report showcases a proportionate, modular approach aligned with EU sustainability reporting objectives while reducing complexity compared to ESRS. It provides a benchmark for SMEs and value-chain actors preparing for increasing ESG data demands.
The EFRAG has published its first-ever sustainability report prepared in line with the Voluntary Standard for Sustainability Reporting by non-listed SMEs (VSME), marking a significant milestone in the practical application of simplified ESG reporting frameworks within the EU sustainability ecosystem.
This development is particularly relevant in the context of the Corporate Sustainability Reporting Directive and the broader European push to create proportionate, scalable reporting standards for smaller entities and organisations outside the full scope of ESRS. By applying the VSME framework to its own disclosures, EFRAG effectively demonstrates how sustainability reporting can be operationalised in a streamlined, decision-useful format without the complexity of full ESRS compliance.
The report follows the modular structure of the VSME standard, covering general disclosures, environmental, social, and governance topics. It emphasises clarity, proportionality, and relevance—core principles of the VSME approach. Unlike ESRS, which is designed for large, in-scope companies under CSRD, VSME focuses on reducing reporting burden while still ensuring transparency and comparability across value chains.
From a regulatory perspective, this publication serves as a practical benchmark for SMEs and other organisations considering voluntary sustainability reporting. It illustrates how entities can structure disclosures around key ESG impacts, risks, and opportunities while maintaining flexibility in data collection and narrative reporting. This is particularly important as large companies increasingly require ESG data from suppliers, creating indirect reporting pressure across value chains.
For companies, the implications are immediate. The report provides a real-world reference for implementing VSME-aligned reporting, supporting internal readiness for ESG data collection, stakeholder communication, and future regulatory developments. It also reinforces the role of VSME as a bridge between no reporting and full ESRS compliance, especially in the context of ongoing EU simplification efforts, including the Omnibus initiative.
Strategically, EFRAG’s move signals a clear direction: sustainability reporting is becoming progressively more inclusive, extending beyond large listed entities to the broader economy. By showcasing a proportionate and usable framework, the VSME standard is positioned as a key tool for scaling ESG transparency without imposing excessive administrative burden.
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