VSME

Voluntary Sustainability Reporting Standard for non-listed SMEs

The VSME gives micro, small and medium-sized enterprises (MSMEs) a practical way to disclose sustainability topics in a structured manner on a voluntary basis and with manageable effort. It can be a meaningful starting point, especially for companies that are not subject to a legal obligation to provide sustainability reporting, as set out in the European Corporate Sustainability Reporting Directive (CSRD) or in the Swiss Code of Obligations (Art. 964 CO).

The VSME at a glance

VSME is a voluntary reporting standard for non-listed MSMEs developed by the European Financial Reporting Advisory Group (EFRAG). In terms of content, the standard is aligned with the topics covered by the European Sustainability Reporting Standards (ESRS), which apply to large companies under the CSRD. At the same time, the VSME is much leaner in structure and tailored to the resources and requirements of smaller businesses. It therefore creates a practical framework for the disclosure of sustainability information while also serving as a value-chain cap by defining which data may be requested from MSMEs along the value chain.

Target group and scope of application of the VSME

The VSME is aimed at companies that are expected to disclose sustainability information in a structured way to customers, banks or investors, but are not subject to CSRD reporting requirements. You can find out which companies are currently required to report under the CSRD in our insight article on the CSRD.

Its relevance for your company

Even if your company is not yet directly subject to reporting requirements today, the demand for reliable sustainability information is growing noticeably. Investors, banks, customers and business partners increasingly expect transparent and comparable data. This is especially relevant if your company is part of the supply chain of large or internationally active businesses. The VSME helps you capture the most important sustainability data, structure it meaningfully and communicate it in a targeted way. At the same time, it shows which disclosures customers or partners in the supply chain may request at most (value-chain cap).

There is also a strategic benefit. Based on the data collected, you can develop a sustainability strategy with concrete goals and measures. This means you not only meet the requirements of your stakeholders, but also position yourself as a responsible market participant and strengthen your competitiveness. At the same time, you are ideally prepared for future reporting requirements. As a result, the report becomes not only a response to external requests, but also a tool for your company’s own development.

Structure and content of the VSME

The VSME covers the same fundamental sustainability topics as the ESRS, but is designed in a much more compact way. The standard consists of a Basic Module and a Comprehensive Module. The Basic Module is designed as an entry point and is a pragmatic starting point particularly for micro-enterprises. The Comprehensive Module expands the reporting with more in-depth content, for example on strategy, climate-related risks or additional information typically requested by banks, investors or larger customers. The Comprehensive Module can only be applied together with the Basic Module.

Regardless of the scope selected, the VSME follows clear reporting principles. Disclosures should be relevant, reliable, comparable, understandable and verifiable. From the second reporting year onwards, comparative information for the previous year is required.

Overview of the modules

General information

Basic Module

B1: Basis for preparation
B2: Practices, policies and future initiatives for transitioning towards a more sustainable economy

Comprehensive Module

C1: Strategy: Business Model and Sustainability – Related Initiatives
C2: Description of practices, policies and future initiatives for transitioning towards a more sustainable economy

Environment metrics

Basic Module

B3: Energy and greenhouse gas emissions
B4: Pollution of air, water and soil
B5: Biodiversity
B6: Water
B7: Resource use, circular economy and waste management

Comprehensive Module

C3: GHG reduction targets and climate transition
C4: Climate risks

Social metrics

Basic Module

B8: Workforce – General characteristics
B9: Workforce – Health and safety
B10: Workforce – Remuneration, collective bargaining and training

Comprehensive Module

C5: Additional (general) workforce characteristics
C6: Additional own workforce information – Human rights policies and processes
C7: Severe negative human rights incidents

Governance metrics

Basic Module

B11:Convictions and fines for corruption and bribery

Comprehensive Module

C8: Revenues from certain sectors and exclusion from EU reference benchmarks
C9: Gender diversity ratio in the governance body

Distinction from other reporting standards

VSME vs. ESRS

The VSME is technically aligned with the ESRS, but differs significantly in scope and complexity. While the ESRS includes more than 1,000 data points and places a strong emphasis on strategy, targets, actions and impacts, the VSME contains around 100 data points and focuses more on practical ESG metrics and core disclosures. The requirements also differ: under the ESRS, a double materiality assessment is mandatory, whereas under the VSME it is recommended but not strictly required. In addition, the ESRS requires a much more comprehensive view of the value chain, while the VSME focuses more strongly on the company itself.

VSME vs. GRI

The GRI Standards are globally used sustainability reporting standards with a strong focus on transparency regarding an organisation’s impacts on the economy, the environment and people. They are modular in structure and broadly applicable, but were not specifically designed for MSMEs. The VSME is much more focused, aligned with the European context and deliberately tailored to the typical requirements of MSMEs in supply chains and financing processes.

Your next steps

1. Clarify relevance

First, assess whether and why the VSME is the right reporting standard for your company. Typical triggers include requirements from large customers, bank requests, financing plans, ESG questionnaires or the desire to manage sustainability more systematically.

2. Review your data basis

Get an overview of which information is already available and which topics are especially relevant for your company. Energy, HR or waste data is often available at least in part, but not structured in the way required for consistent reporting. Environmental metrics also require greenhouse gas emissions calculations.

3. Define scope and responsibilities

Decide which reporting scope you want to start with (Basic Module or Comprehensive Module) and who internally will provide, review and approve the relevant information. Especially in smaller companies, a clear and pragmatic process is often more important than an overly ambitious start.

How our services support you

We help you implement the VSME in your company in a practical way and with proportionate effort. We begin by clarifying whether the standard makes sense for your business and which module fits your requirements. We then structure the relevant topics, translate the requirements into a workable data collection process and support you in preparing a consistent report.

For structured data collection, we work with the VSME tool from Sulytics, which can also be used to generate the report in a system-supported way afterwards.