EFRAG Launches Voluntary Sustainability Reporting Framework for SMEs

At the request of the European Commission, on 17th December 2024, EFRAG delivered a Voluntary Reporting Standard for non-listed micro, small and medium-sized undertakings (VSME).

Scope of the VSME 

The VSME standard is tailored for undertakings not covered by the Corporate Sustainability Reporting Directive (CSRD). This standard addresses the same sustainability topics as the European Sustainability Reporting Standards (ESRS) for larger undertakings. However, it has been tailored to be proportionate, reflecting the unique characteristics and capacities of SMEs. The VSME provides SMEs with a standardised framework for sustainability reporting, enhancing their ability to secure green financing and transition towards a more sustainable economy. It enables SMEs to meet the sustainability data needs of larger undertakings while replacing fragmented ESG data requests. This streamlined approach ensures consistent, clear, and effective sustainability disclosures, making it easier for SMEs to align with industry standards and strengthen their position in the market.

Main Components of the VSME 

The VSME is divided into two modules: the Basic Module and the Comprehensive Module.

The Basic Module serves as the primary approach for micro-undertakings and sets the minimum requirements for other undertakings. Key topics covered in this module include:

• Energy and greenhouse gas emissions,
• Pollution of air, water and soil,
• Biodiversity,
• Water,
• Workforce health and safety,
• Convictions and fines for corruption and bribery.

The Comprehensive Module builds upon the Basic Module by including additional data points that are commonly requested by an undertaking’s clients. It thoroughly addresses the information needs of the clients, complementing the foundational disclosures in the Basic Module. These additional disclosures align with the legal and regulatory obligations of the undertaking’s clients, ensuring that the provided information meets broader compliance requirements. Key topics covered in this module include:

• Greenhouse gas emissions reduction targets and climate transition,
• Climate risks,
• Human rights policies and processes,
• Severe negative human rights incidents,
• Gender diversity ratio in the governance body.
• Unlocking Growth Opportunities Through the VSME

The introduction of the VSME presents significant growth opportunities for SMEs. By aligning with this standardised framework, SMEs can provide clients with the ESG data they require efficiently, making them more attractive as suppliers. This proactive approach can differentiate SMEs from competitors who may struggle to meet such demands. Moreover, the VSME facilitates access to green financing, as transparent sustainability reporting is increasingly valued by investors seeking environmentally and socially responsible ventures. SMEs that adopt this standard can also future proof their operations by staying ahead of evolving requirements, ensuring they remain compliant as sustainability norms continue to tighten globally.

How We Can Help 

At Zampa Partners, we assist SMEs through the process of collecting and calculating the necessary data required by the VSME, ensuring the information is accurate and aligns with reporting standards. Our support simplifies this process, enabling SMEs to meet their sustainability obligations, strengthen their ESG profiles, and enable them to confidently present their ESG data.