What does VSME stand for?

The VSME stands for Voluntary reporting standard for SMEs. The objective of the standard is to support SME’s in providing information that will help satisfy the data needs of large enterprises, banks and investors requesting sustainability information from their suppliers to assess risk and access to finance. (EFRAG)

By Klappir

EFRAG's VSME Standard, empowering SMEs through voluntary sustainability reporting

VSME stands for the Voluntary standard for non-listed micro-, small and medium-sized companies (undertakings) as published by EFRAG.

The standard is aiming for improved management of sustainability issues SME's face i.e. environmental and social challenges such as pollution, workforce health and safety. This will support their competitive growth and enhance their resilience in the short-, medium- and long-term and contribute to a more sustainable and inclusive economy.

The VSME is voluntary and applies to as mentioned for non-listed micro-, small and medium-sized companies.

(a ) A company is micro if it does not exceed two of the following thresholds:

€450,000 in balance sheet total;
€900,000 in net turnover;
and an average of 10 employees.

(b) A company is small if it does not exceed two of the following thresholds:

€5 million in balance sheet total;
€10 million in net turnover;
and an average of 50 employees.

€25 million in balance sheet total;
€50 million in net turnover;
and an average of 250 employees.

These companies fall outside the scope of the Corporate Social Reporting Directive (CSRD) but are encouraged to use the VSME standard.

Consistency with ESRS for large companies has been carefully considered in the preparation of the standard while defining proportionate requirements. The standard has no legal authority unlike the ESRS for large companies.

The standard has two modules that the undertaking can use to prepare its sustainability report:

(a) Basic Module: Disclosures B1 and B2 and Basic Metrics (B3 to B11). This module is the target approach for micro-undertakings and constitutes a minimum requirement for other companies; and

(b) Comprehensive Module: this module sets datapoints in addition to disclosures B1-B11, which are likely to be requested by banks, investors and corporate clients of the company on top of the Basic Module.

Category	Basic Module	Comprehensive Module
Scope	Essential ESG disclosures across environment, social, and governance.	Expands on the Basic Module with additional disclosures and greater depth.
Number of data points	11 Disclosure Requirements with a total of 39 Data Points	9 Disclosure Requirements and 31 Data Points. Combined Basic and Comprehensive Modules: 20 Disclosure Requirements with a total of 70 ESG Data Points.
Complexity	Streamlined reporting with simplified language and "if applicable" principle.	More complex disclosures requiring in-depth analysis and data (e.g., targets, risk assessment, human rights).
Key ESG Topics (Env.)	Energy & GHG emissions (Scope 1 & 2), Pollution, Biodiversity, Water, Waste	Includes Basic Module topics plus potential Scope 3 emissions, GHG reduction targets, climate transition, and climate risks.
Key ESG Topics (Soc.)	Workforce characteristics, Health & safety, Remuneration & training.	Includes Basic Module topics plus potential management gender ratio, human rights policies, and reporting on severe human rights incidents.
Key ESG Topics (Gov.)	Anti-corruption convictions and fines.	Includes Basic Module topics plus revenues from certain sectors and gender diversity in governance body.
Prerequisites	None explicitly stated for the Basic Module.	Application of the Basic Module is a prerequisite.

By Klappir3 April 2025