VSME voluntary ESG standard: the guide for SMEs in 2026

The VSME (Voluntary Sustainability Reporting Standard for non-listed SMEs) is a voluntary sustainability reporting framework developed by EFRAG (European Financial Reporting Advisory Group) on a mandate from the European Commission. It forms part of the SME Relief Package of 2023 and was formally approved by the EFRAG expert group on 22 October 2024^[2].

The idea can be summed up in one sentence: give non-listed SMEs, which form the vast majority of European businesses, a structured and recognised framework for communicating their ESG performance, without the complexity of the ESRS that apply to large companies. The target scope: companies with fewer than 250 employees, outside the mandatory perimeters. The standard covers the same pillars as the CSRD (environmental, social, governance), but with a drastically reduced number of data points: around fifty for the basic module, compared to several hundred for the full ESRS^[4].

Adoption is expected to be consolidated by a European Commission delegated act anticipated in 2026, which would give the VSME a reference status within the supply chain. For now, it is already freely available, published in multiple languages, and supported by practical guides issued by EFRAG.

Three profiles emerge, and they are quite different. The most common case: an SME that is a supplier to large companies subject to the CSRD. Those customers remain in the mandatory scope and must collect ESG data from their supply chain. Without a common framework, the SME ends up filling out disparate questionnaires, one per customer, rarely compatible with each other. The VSME replaces this proliferation with a single reference.

The second profile: an SME seeking financing. Banks and investors also have their own sustainable reporting obligations (SFDR, prudential requirements). A VSME report provides them with structured, comparable data rather than a patchwork of proprietary indicators. That is a tangible advantage in a credit line negotiation or a fundraising round.

The third, more strategic case: an SME looking to differentiate itself in markets where ESG is becoming a selection criterion. Public tenders, key account qualification, supplier charters: being able to produce a VSME report rather than a vague statement of intent changes the conversation entirely. To understand the broader logic of mandatory reporting, our article on what the CSRD changes for mid-sized companies in 2026 puts the thresholds in perspective.

This is the point that many VSME presentations gloss over, yet it matters most for an SME. The Omnibus directive introduces, via Article 29d, a mechanism called the "value chain cap", a legal ceiling on what a CSRD-bound company can demand from its suppliers^[3]. In practical terms: a customer can no longer request ESG data beyond the scope set out in the VSME. For the first time, SMEs have a safeguard against the transfer of reporting obligations.

Before this mechanism, the dynamic was asymmetric. Large accounts would effectively transfer part of their CSRD reporting burden onto their suppliers, each imposing its own format and level of granularity. The result: an SME with multiple large customers would fill out ten different questionnaires for ten clients. The value chain cap puts an end to this, provided the SME knows how to invoke it. Adopting the VSME is also a way of arming oneself with a recognised framework to respond "within regulatory limits".

The VSME is voluntary; the CSRD is mandatory for those exceeding the Omnibus thresholds (over 1,000 employees and €450 million in net revenue, cumulatively). But the real difference lies in the burden and the method. The CSRD requires a double materiality assessment, an audit, digital publication (XHTML/XBRL), and a volume of disclosures running into hundreds of data points. The VSME, by contrast, removes the materiality assessment requirement and relies on a closed list of indicators^[3][4].

The alignment with ESRS has a practical advantage: if your company eventually crosses the CSRD thresholds, the data collection work done under the VSME format is not wasted. A large proportion of the data maps across, and the transition builds on an already-structured foundation rather than starting from scratch.

The VSME is organised into two nested modules, allowing companies to calibrate the effort according to their maturity and the actual demands of their partners^[4]. The basic module (B1 to B11) covers around fifty primarily quantitative data points: energy consumption, scope 1 and 2 GHG emissions, headcount, workplace accidents, and general governance information. This is the foundation, designed to be accessible even to a micro-enterprise.

The full module (C1 to C9) adds more qualitative disclosures: ESG policies, emissions reduction targets, climate transition plans, serious human rights incidents. It corresponds to what the most demanding banks and large customers are likely to request. Each company chooses its level according to its profile: a local craftsman will stop at the basic module, while an export-oriented SME targeting public procurement will go all the way to the full module.

This is where the VSME stops being an abstract topic for an SME that already manages its professional spending. Several basic module disclosures relate directly to line items you are already invoicing and tracking today: energy consumption, emissions from travel and fleet operations, procurement. Yet this data already exists, buried in your fuel card statements, expense reports, and accounting records.

A professional payment solution that consolidates fuel, EV charging, electronic toll, and expense reports naturally generates much of the VSME's raw material: mileage, litres of fuel, kWh of charge, journeys. Rather than reconstructing these figures by hand at year-end, the data flows continuously and can be exported in the required format. This is one of the angles where Greenway's 1%ForAll® programme comes into its own: every transaction simultaneously funds a measurable environmental impact, and the aggregate directly feeds ESG reporting, whether VSME or CSRD.

On emissions, be careful not to conflate accounting scope and reporting scope. Scopes 1 and 2 (direct and energy-related emissions) are relatively straightforward to extract from well-maintained expense accounting. Scope 3 (indirect emissions across the value chain) is another matter entirely, and the VSME does not require it at the basic module level. That is precisely the subject covered in our practical guide to scopes 1, 2 and 3.

There is no need to target the full module in year one. The approach that works: start by mapping what you already have: energy invoices, fleet data, headcount, governance. A portion of the basic module can be completed without any additional data collection. Then identify the two or three disclosures that YOUR actual customers care about (not all of them: yours specifically). A single serious client questionnaire is enough to define the scope.

On the tools side, EFRAG itself lists free or publicly recognised emissions calculators. In France, the Bilan Carbone^[2] is one example. The VSME is designed to be accessible without a consulting firm, at least for the basic module. The complexity comes less from the standard itself than from the quality of upstream data, which is why having clean, traceable professional expense records makes all the difference.