New voluntary sustainability reporting standard released for SMEs (VSME)
The European Commission introduces a simplified set of criteria intended to assist small and medium-sized enterprises in reporting their ESG performance and lowering administrative requirements
29 Jul 2025The recent implementation of the Corporate Sustainability Reporting Directive (CSRD) by the European Union will soon require many small and medium-sized enterprises (SMEs) to prepare sustainability reports.
In this regard, on July 30th, the European Commission adopted a recommendation on the voluntary sustainability reporting standard specific to non-listed small and medium-sized enterprises. The standard was developed by the EFRAG (European Financial Reporting Advisory Group), the Commission's technical advisory body for sustainability reporting, with the aim of facilitating SMEs' access to sustainable financing and ESG-compliant supply chains, while also providing a useful tool to respond to transparency requests from customers, banks, and investors.
The standard, called Voluntary ESRS for non-listed SMEs (VSME), is part of the framework provided by the CSRD but is not binding. It is proposed as a voluntary support tool, particularly for companies that are not subject to reporting obligations.
Among the main objectives are:
- Simplifying the collection and communication of ESG (environmental, social, and governance) data.
- Providing consistency between the information communicated by SMEs and the official standards applicable to large companies.
- Preparing SMEs for potential future regulatory developments or market demands in terms of sustainability.
The package includes two distinct tools:
- A basic module, designed to provide an initial approach to ESG reporting.
- An advanced tool, for SMEs that wish to provide more details or are part of more complex value chains.
This initiative is part of a broader European strategy aimed at strengthening sustainability in the economic system, offering SMEs a gradual and accessible approach. In perspective, this could also prove useful in facilitating companies' interaction with entities obliged to report under the CSRD, with positive impacts on supply chain compliance.
For companies wishing to evaluate the adoption of these tools, a preliminary analysis of their ESG processes is recommended. Consulting support can be strategic in identifying relevant data and ensuring consistency with existing standards.