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    VSMEVoluntary Sustainability Reporting Standard for SMEs

    Definition

    A voluntary sustainability-reporting standard developed by EFRAG for non-listed SMEs, now the basis of the EU voluntary standard and value-chain cap.

    Editorial definition: The QHSE Standard, updated 3 October 2026 · https://qhsetech.com/glossary/vsme

    Scope: A customer's request for information is distinct from a statutory CSRD reporting obligation.

    Sources checked: . Examples are editorial illustrations.

    From the VSME to the EU standard for voluntary use

    EFRAG developed the voluntary standard for non-listed SMEs, known as the VSME, at the Commission's request as part of the 2023 SME relief package, and delivered it in December 2024. In EFRAG's description it is aimed at companies below 250 employees that sit outside the mandatory CSRD scope, and as consisting of two modules, Basic and Comprehensive, meant to meet much of what banks, investors and large customers ask of smaller firms. It released a digital template, XBRL taxonomy and converter in May 2025. The Commission issued Recommendation (EU) 2025/1710 of 30 July 2025, which encourages large companies and financial institutions to base their requests to SMEs on the standard as far as possible.

    Directive (EU) 2026/470 turned this into law. A new Article 29ca of the Accounting Directive empowers the Commission to adopt standards for voluntary use by undertakings with up to 1,000 employees, based on the Recommendation in its original version and reviewed at least every four years. Delegated Regulation (EU) 2026/1560 of 3 July 2026, published on 21 September 2026, does so. It keeps the modular structure of a basic and a comprehensive module and sets essential, circumstance-specific, voluntary and sector-specific datapoints, with some essential datapoints voluntary for undertakings of 10 employees or fewer. The Regulation allows use of EFRAG's practical guidance, and its recitals say that undertakings applying it are not obliged to seek assurance. It enters into force on the third day after publication, and the recitals treat the 2025 Recommendation as no longer producing legal effects from then.

    The standard also acts as a value-chain cap. Undertakings reporting under the CSRD may not demand more from value-chain undertakings of up to 1,000 employees than the dedicated datapoint list in Annex II of the Regulation, and that cap applies to information gathered for CSRD reporting under national law, not to requests needed for other Union obligations. A protected undertaking may decline anything above it as of right, and a reporting undertaking may rely on a self-declaration of size unless it knows, or ought reasonably to know, that the declaration is manifestly wrong. The cap applies to financial years that begin on 1 January 2027 or later. This page is general information and not advice on how to answer a particular customer request.

    Sources opened :

    What a VSME record holds in software

    • The module applied, Basic alone or with Comprehensive, and the reporting period.
    • Size at the balance sheet date, with average employees, to test the 10-employee and 1,000-employee lines and to support a self-declaration.
    • Datapoints answered with value, unit, period and source, and those left out with the reason.
    • Whether the report is on an individual or consolidated basis.
    • Data requests received from customers, banks or investors, with requester, date and items asked, and which fall within the standard.
    • Replies sent and any right to decline exercised, with the date.
    • The edition used, noting that the delegated regulation followed the 2025 Recommendation.

    VSME, the ESRS and a customer questionnaire

    The VSME is a voluntary standard for undertakings that are not required to report under the CSRD, while the ESRS are mandatory for those in scope. A customer questionnaire is a request, not a law. A protected undertaking may decline what goes beyond the standard when the request is made for CSRD reporting. Requests made for other purposes, such as by a lender, do not carry that right, although the Commission encourages financial institutions to limit them.

    A hypothetical example: answering a customer request

    The suppliers and the customer in this case are invented, and the case describes no real company. A supplier has 60 employees. A customer with 3,000 employees and EUR 900 million of net turnover, above both CSRD limits, sends a questionnaire of 70 questions. The supplier's team compares it with the datapoints in the cap list. Of the 70 questions, 45 fall within the list and 25 do not, since 70 minus 45 is 25. It answers the 45, records them against the cap-list datapoints, and tells the customer in writing that it declines the other 25 because they exceed the standard.

    A second supplier has 8 employees and uses the same standard. It notes that the standard makes some datapoints optional for undertakings of 10 employees or fewer, and its record marks them as not provided by choice, so a reader can tell a choice from a gap. Both suppliers record the date, the version of the standard and who approved the figures. Neither seeks assurance, since the recitals say it is not obliged.

    Common misunderstandings about the VSME

    • The VSME is not mandatory. A customer cannot make it so by questionnaire where the right to decline applies.
    • The 2025 Recommendation is not the current text. The recitals of Delegated Regulation (EU) 2026/1560 treat the Recommendation as no longer producing legal effects from its entry into force, although the Regulation is based on it.
    • The 250-employee description is not the only line. The Directive uses a line of 1,000 employees for the voluntary standard and the cap.
    • The Basic Module is not the same as the cap list. The cap covers essential datapoints only, in a list that separates undertakings above 10 employees from those with 10 or fewer.
    • Applying the standard is not assurance or certification.

    How the VSME relates to other glossary terms

    The VSME sits beside the mandatory standards as their voluntary, proportionate counterpart.

    • ESRS: the mandatory standards for undertakings in scope, with the cap defined by the voluntary standard.
    • CSRD: the directive whose reporters are limited in what they can ask of smaller partners.
    • EU Omnibus: the package that wrote the value-chain cap and the voluntary standard into law.
    • ESG: the wider topic area behind the questionnaires SMEs receive.

    Records and evidence that usually exist for VSME reporting

    • The completed report and the datapoint answers behind it.
    • Payroll or headcount records that support the employee figure.
    • Energy, fuel and waste data from invoices and meters.
    • Customer and lender requests with dates and the replies sent.
    • The edition used and the date of approval.
    • Any size self-declaration issued to a customer.

    What a software tool needs to capture for the VSME

    • Module and datapoint structures held as data, with the edition they belong to.
    • An employee count field that supports the 10 and 1,000 employee lines.
    • Support for marking a datapoint voluntary or omitted, with a reason.
    • A request log that compares each customer question with the cap list.
    • Export of the report in a form a customer or lender can read, including the digital template where used.
    • Evidence attachments for each datapoint.
    • Version history that shows what changed when the Regulation followed the Recommendation.

    Catalog profiles documenting ESG data and reporting

    Profiles are listed by the ESG platform workflow rule. Being listed does not mean a product supports the VSME modules or the EU voluntary standard; ask in a demonstration.

    Same rule for every product: tagged “ESG Reporting”, “ESG Frameworks Reporting”, “Sustainability Reporting”, “ESG & Sustainability” or “Sustainability & ESG”, with a sourced ESG reporting or disclosure capability in its record, or one the vendor stated to us, labelled as vendor-stated. Documented and conditional capabilities qualify; check the linked scope before treating a module as included.

    Tekmon pays for a sponsored placement (above); its place in this list follows the same rule as every entry. How lists are ordered

    All 24 matching profiles are shown. Documentation review, not hands-on testing or a claim of compliance.

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    Frequently asked questions

    Who can use the VSME?

    EFRAG describes it as intended for companies with fewer than 250 employees outside the mandatory CSRD scope. The EU standard for voluntary use in Delegated Regulation (EU) 2026/1560 is open to undertakings not subject to mandatory reporting and sets its cap for undertakings with up to 1,000 employees.

    Can a large customer demand more than the standard?

    A customer reporting under the CSRD may not require more than the dedicated datapoint list, and the protected undertaking has a statutory right to decline. That right is tied to requests made for CSRD reporting, and the Commission only encourages financial institutions to limit theirs.

    Is assurance required?

    The Regulation's recitals say undertakings that apply the standard need not seek assurance on what they report.

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