What are VSME?
I Voluntary Sustainability Reporting Standards for Non-Listed SMEs (VSME) I am a new voluntary reporting framework, published in December 2024 by the European Financial Reporting Advisory Group (EFRAG), designed for Small and Medium Enterprises (SMEs) not subject to CSRD.
The goal is to provide a more slender and approachable compared to existing reporting standards, helping smaller companies to integrate ESG communication in their processes so uncomplicated Ed efficacious.
In a context in which the demand for reliable data on sustainability by partners, customers, investors and banks, VSME represent a solution for Standardize the ESG reporting, often fragmented and inhomogeneous.
Thanks to a clear and structured framework, allow SMEs to communicate their sustainability performance, while reducing the administrative burdens associated with data collection and reporting.
Comparison between VSME, GRI and ESRS: summary table
How are the VSME standards structured?
Gli VSME standard are divided into two modules designed to allow SMEs to respond effectively to requests for ESG reporting from the most demanding stakeholders (banks, investors and large client companies):
- Base module (Basic Module);
- Comprehensive Module (Comprehensive Module).
Let's look at them in more detail.
Base module
The Base Module of the VSME standards is developed in 11 points (from B1 to B11), divided into three areas of theESG: Environmental, Social and Governance.
The intent is to provide a framework clear and synthetic some basic information on corporate sustainability.
- General Information
B1 (General Data): basic information about the company and the type of report compiled.
B2 (Future Practices, Strategies and Initiatives for the Transition to a More Sustainable Economy): adoption of present and future initiatives for the transition to a more sustainable economy.
- Environmental (Environment)
B3 (Energy and Greenhouse Gas Emissions): Estimate of Scope 1 and 2 emissions according to GHG Protocol.
B4 (Air, Water and Soil Pollution): environmental impacts on water, atmospheric and soil resources.
B5 (Biodiversity): number and surface area of company sites located in areas sensitive to biodiversity.
B6 (Water): water collection and consumption, with a focus on areas with high water stress.
B7 (Resource Use, Circular Economy and Waste Management): adoption of circular economy principles and data on waste produced, recycled and reused.
- Social (Company)
B8 (Workforce, General Characteristics): data on number of employees, type of contract, gender, country and turnover.
B9 (Workforce, Health and Safety): number of accidents at work, rate of injuries and related deaths.
B10 (Workforce — Pay, Collective Bargaining and Training): gender pay gap, salaries compared to minimum contracts and annual training hours.
- Governance
B11 (Convictions and fines for corruption and bribery): number of convictions and amount of fines received for violations of anti-corruption and anti-bribery laws.
Comprehensive module
The Comprehensive Module is designed for companies that need integrate additional data in response to specific stakeholder requests.
This is a complementary study to the Basic Module, which allows you to provide a more detailed picture of the strategy and of the ESG performance.
Here are the main points included in this form.
- C1: Business model and initiatives related to sustainability.
- C2: Future practices, policies and initiatives for the transition to a more sustainable economy.
- C3: GHG reduction objectives and climate transition plan.
- C4: Climate risks.
- C5: Additional general characteristics of the workforce.
- C6: Human Rights Policies and Processes.
- C7: Serious negative incidents on human rights.
- C8: Revenues from specific sectors and exclusion from EU benchmarks.
- C9: Gender diversity in governance bodies.
Why will VSME play an increasing role in the future?
In recent weeks, the European Commission presented the Omnibus package, a proposal to amend the current European guidelines on sustainability that introduces significant simplifications in the field of reporting.
Although at the moment it is only one legislative proposal, the text must be approved by Parliament And from European Council before becoming law and, subsequently, transposed by individuals Member States in their respective legal systems.
Even if the legislative process is not yet complete, it is unlikely that there will be any substantial changes compared to what has already been proposed.
Among the main changes, the Omnibus Package provides that thereporting obligation According to the CSRD, it concerns only companies with more than 1,000 employees, provided that they meet at least one of the other two dimensional criteria (50 million euros in revenues and/or 25 million euros in equity).
In addition, the application of the directive will be delayed by Two years: companies that should have published the first CSRD report in 2026 (on 2025 data) will now have to do so in 2028 (on 2027 data).
This means that companies with less than 1,000 employees, which would initially have been subject to the reporting requirement in 2026, will no longer be required to do so according to the CSRD. However, it is likely that these businesses will be encouraged to Report voluntarily according to the new VSME standards, to meet transparency requests coming from customers, suppliers and other stakeholders who continue to be subject to the CSRD.
Also with regard to the CSDDD, the Omnibus Package introduces a Delay by one year in the application: the directive will come into force starting from July 2028, with periodic assessments along the value chain every 5 years instead of every year. This change further strengthens the role of VSME, because even companies with more than 500 employees (subject to CS3D) must request their suppliers to align ESG information to the new VSME standards.
In conclusion, the adoption of VSME will become more and more strategic for companies not subject to CSRD, but that operate within larger supply chains. Drafting a sustainability report Volunteering according to these standards not only helps companies to better structure their ESG communication, but it also makes it possible to respond effectively to transparency requests from partners and stakeholders.
The 5 advantages of using VSME standards
Adopting VSME represents a strategic choice for European SMEs and aconcrete opportunity to improve your business.
Ecco 5 key benefits of using these reporting standards.
- Easy access to sustainable finance
More and more financial institutions are offering advantageous conditions to companies that demonstrate a concrete commitment to ESG. Reporting according to VSME can therefore open the door to sustainability-related funding. - Standardization of ESG information
Sustainability issues are often communicated in a fragmented and inhomogeneous way. VSME provide a clear and consistent framework, allowing SMEs to communicate their ESG performance to customers, suppliers and stakeholders in an effective and structured way. - Strengthening business reputation
Demonstrating transparency and commitment to sustainability strengthens a company's credibility. An ESG balance sheet based on VSME helps to improve business reputation.
- Response to transparency requests
Investors, banks and customers are increasing pressure on companies to provide reliable data on their ESG practices. VSME offers a practical solution to respond to these requests in a clear and structured way, avoiding losing business opportunities.
- Better risk management and market competitiveness
A more careful management of ESG information makes it possible to identify and mitigate business risks early, improving the company's resilience. In addition, a structured approach to sustainability makes SMEs more competitive compared to those who do not yet integrate these aspects into their business model.
