The VSME standard: A practical framework for sustainability reporting

The Voluntary Standard for non-listed Micro, Small, and Medium-sized Enterprises (VSME) provides a structured approach for SMEs to disclose their sustainability efforts efficiently and effectively. Larger companies are increasingly requesting sustainability-related information from their suppliers. The VSME Standard offers a proportionate, voluntary framework that enables companies to communicate sustainability performance to customers, access financial markets, and improve internal sustainability management.

The European Financial Reporting Advisory Group (EFRAG) created this standard to provide a simplified framework for sustainability reporting for SMEs. It serves as simplified alternative to the ESRS, which is mandatory for larger companies. Especially now, after the publication of the Omnibus Regulation, the VSME standard is gaining more importance, as many companies will no longer fall under the CSRD obligation.

Developed by EFRAG (European Financial Reporting Advisory Group), the standard provides a clear and structured method to report on sustainability issues. VSME reporting provides the following benefits:

• Competitive advantage: Companies that proactively disclose sustainability data can differentiate themselves to (potential) customers.
• Improved financial access: Banks and investors increasingly require ESG datapoints for investments or credit issuing decisions. Providing structured and reliable sustainability information in the VSME format gives you an advantage.
• Risk and Opportunity management: Tracking and reporting sustainability performance helps identify risks, reduce costs, and capitalise on opportunities.

The VSME standard consists of two reporting modules:

1. Basic Module: A streamlined framework covering key sustainability indicators across environmental, social, and governance (ESG) aspects.
2. Comprehensive Module: An extended reporting option that includes additional disclosures relevant to banks, investors, and corporate partners.

Each module has specific requirements. These are split into four categories with underlying sections as presented below:

To develop your sustainability report using the VSME standard, Ecomatters will work through the following 4 steps with you:

Kick-off and introduction

• Introductory session to explain the basic and comprehensive VSME modules, along with company-specific elements to be included in the sustainability report. A summary of key actions will be provided.

Data collection

• Provision of a customised data questionnaire to gather the necessary sustainability metrics, including modules for Scope 1 and 2 GHG emissions.
• Support provided during data collection and a final check for completeness and compliance with the VSME standard. Our expertise will help address any data gaps or discrepancies.

GHG reduction target setting

• Workshop on setting Scope 1 and 2 emission reduction targets (Disclosure C3 – comprehensive module only), ensuring that targets are realistic, measurable, and tailored to your organisation’s goals.

Sustainability report development

• Preparation of the sustainability report, consisting of a communication section with a narrative summary, key metrics and targets, and a formal VSME reporting section covering all required disclosures.

Partnering with Ecomatters ensures that your sustainability reporting is both effective and compliant with current standards. Our tailored approach is designed to guide you through each step of the reporting process. Building on our sustainability reporting experience we can also help with:

• Strategy development
• Data collection
• IT solution selection
• Scope 1,2 and 3 emission calculations
• Report section development
• Expert insights

Get in touch or schedule a call with one of our experts to explore how Ecomatters can support you today.