Empowering SMEs with simplified sustainability reporting: VSME standard gains momentum

On 7 April 2025, EFRAG hosted its high-profile “VSME in Action” event in Brussels, spotlighting the growing role of the Voluntary Sustainability Reporting Standard for non-listed SMEs (VSME). The initiative, part of the EU’s broader SME Relief Package and Omnibus Simplification proposals, aims to streamline ESG reporting for Europe’s 24 million SMEs—removing the burden of duplicative questionnaires and enabling better access to green finance.

Key takeaways from the event:

• Political support and intention to adopt: On June 3, 2025, during EFRAG’s Second SME Forum Meeting, it was confirmed that the Commission intends to adopt the VSME Standards as a recommendation in the coming months, with a possible Delegated Act to follow depending on political negotiations under the Omnibus reforms. This would legally anchor the VSME as a baseline for value chain sustainability disclosures and sub-threshold SME reporting.
• Structure of the standard: VSME is built around two modular components:
  • A Basic Module (11 disclosures) covering essentials such as GHG emissions, workforce, circularity, and anti-corruption.
  • An optional Comprehensive Module (9 disclosures), addressing climate targets, business model alignment, and human rights.
• Designed for real SME use: Based on feedback from over 300 companies and 700 banks, the standard avoids a materiality assessment and focuses on a simplified “if applicable” logic to ease adoption.

Digital Tools Launched:

On May 27, EFRAG released two practical tools to support SME uptake:

• Excel-based digital template: A user-friendly spreadsheet that auto-calculates emissions and validates data entries through conditional logic.
• XBRL taxonomy: Facilitates structured digital reporting, allowing future integration with national reporting platforms and value chain data portals.

These tools form part of a broader VSME ecosystem, which includes a new SME Forum, support guides for key disclosures (e.g., GHG targets, human rights), and upcoming outreach events, including an OECD session in June.

While the VSME remains voluntary, its success hinges on buy-in from both SMEs and their financial and supply chain partners. The standard has been praised for offering a proportionate, credible alternative to ad hoc ESG questionnaires. As noted during the event, “The VSME is not a management tool—it’s a practical shield against the trickle-down burden of sustainability reporting.”