EFRAG VSME: Voluntary Sustainability Reporting for SMEs

Last updated: May 25, 2026. EFRAG's Voluntary Sustainability Reporting Standard for non-listed SMEs, usually called VSME, gives smaller companies a simpler way to prepare sustainability information for banks, investors, corporate customers, and other business partners. It is voluntary, but it matters because many SMEs are asked for sustainability data even when they are outside mandatory CSRD reporting scope.

Short answer: VSME is useful for SMEs that need a practical sustainability reporting structure without preparing a full ESRS report. The Basic Module covers core company, environmental, social, and governance information. The Comprehensive Module adds information that banks, investors, and corporate customers are more likely to request, including business model, climate targets, Scope 3, climate risks, human rights, and governance information.

What is the VSME standard?

The VSME standard was developed by EFRAG for non-listed micro, small, and medium-sized undertakings. EFRAG delivered its technical advice to the European Commission in December 2024, and the European Commission later presented/adopted it as a voluntary recommendation to ease the sustainability reporting burden on SMEs.

The purpose is practical. Large companies, banks, investors, and customers increasingly ask smaller businesses for sustainability information. Without a simpler standard, SMEs can receive inconsistent questionnaires and requests that feel like a smaller version of full CSRD reporting. VSME gives SMEs and their business partners a shared reference point.

VSME is not the same as ESRS for companies in mandatory CSRD scope. It is a voluntary, simplified standard designed for smaller undertakings and for companies that want to provide useful sustainability information without overbuilding the reporting process.

Who is VSME for?

VSME is aimed at non-listed SMEs, including micro, small, and medium-sized undertakings. In practical terms, it is most relevant for companies that:

• are outside mandatory CSRD reporting scope but still receive sustainability data requests;
• supply large companies that need value-chain information;
• need sustainability information for banks, lenders, or investors;
• want a simple first sustainability report;
• need to organize emissions, workforce, governance, and policy data; or
• want to reduce the burden of responding to different questionnaires each year.

Companies should still confirm their own reporting status. Being able to use VSME voluntarily does not automatically mean a company has no mandatory reporting obligation in any jurisdiction.

Why VSME matters for suppliers

Many SMEs encounter sustainability reporting through a customer request rather than a law. A large buyer may ask for emissions data, renewable electricity evidence, workforce information, human rights policies, supplier practices, or governance information. That buyer may be collecting data for its own Scope 3 emissions, CSRD/ESRS reporting, CDP disclosure, EcoVadis assessment, procurement policy, or internal supplier-risk process.

VSME can help because it gives the supplier a structured response base. Instead of answering each request from scratch, the SME can maintain a VSME-aligned evidence file and adapt it for customer portals, questionnaires, and annual refreshes.

For customer-specific requests, the first step is still to read the wording of the request. If the buyer asks for service-level emissions, supplier-specific emission factors, independent assurance, or a particular portal response, a VSME report alone may not be enough. For that situation, Keslio's supplier request support can help interpret the request and prepare the right response path.

How VSME is structured

The VSME standard has two modules:

• Basic Module: the starting point, with disclosures B1 and B2 plus basic metrics B3 to B11.
• Comprehensive Module: additional disclosures C1 to C9, designed to address information likely to be requested by banks, investors, and corporate clients.

The Basic Module can stand alone. The Comprehensive Module builds on the Basic Module and should generally be used when a stakeholder needs deeper information.

What the Basic Module covers

The Basic Module is the practical starting point. It asks for general information, core sustainability practices, and basic ESG metrics.

At a high level, the Basic Module covers:

• B1: basis for preparation, such as whether the report is individual or consolidated and which module option is used;
• B2: practices, policies, and future initiatives for transitioning toward a more sustainable economy;
• 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;
• B8: workforce general characteristics;
• B9: workforce health and safety;
• B10: workforce remuneration, collective bargaining, and training; and
• B11: convictions and fines for corruption and bribery.

For many SMEs, the most immediate data work will be energy use, GHG emissions, water, waste, workforce counts, health and safety records, training information, and governance disclosures.

What the Comprehensive Module adds

The Comprehensive Module is for SMEs that need to provide more information to business partners. It is especially relevant when a bank, investor, or corporate customer needs more detail than the Basic Module provides.

The Comprehensive Module covers:

• C1: business model, strategy, products and services, markets, and key business relationships;
• C2: practices, policies, and future initiatives for sustainability transition;
• C3: GHG reduction targets and climate transition;
• C4: climate risks;
• C5: additional workforce characteristics;
• C6: human rights policies and processes for the workforce;
• C7: severe negative human rights incidents;
• C8: revenues from certain sectors and exclusion from EU reference benchmarks; and
• C9: gender diversity ratio in the governance body.

In plain terms: use the Basic Module to create a first structured sustainability report. Add the Comprehensive Module when a buyer, lender, investor, or other stakeholder asks for more detail.

What data should an SME prepare first?

Before trying to complete every disclosure, an SME should collect a simple evidence base. Useful starting records include:

• legal entity information and reporting boundary;
• site list and countries of operation;
• employee counts and workforce characteristics;
• electricity, fuel, and other energy bills;
• basic GHG emissions calculations;
• water bills or meter records where relevant;
• waste contractor reports or waste estimates;
• health and safety incident records;
• training records;
• collective bargaining or workforce representation information where relevant;
• policies, practices, and planned initiatives;
• anti-corruption and bribery records; and
• customer, bank, or investor requests that the VSME report needs to support.

For emissions specifically, see Keslio's guide to improving emissions data accounting and its guide to measuring greenhouse gas emissions for small businesses.

How VSME can reduce reporting burden

The value of VSME is not only the final report. The value is the repeatable reporting system behind it. If an SME maintains a VSME-aligned file each year, it can respond faster to:

• customer sustainability questionnaires;
• supplier onboarding requests;
• bank and lender ESG questions;
• investor due diligence;
• CDP or EcoVadis preparation;
• green procurement requirements;
• annual sustainability updates; and
• management discussions on energy, emissions, workforce, and risk.

This does not mean every SME should publish a long public report. Some companies may keep VSME information internally and share selected answers with customers or financial partners. The right output depends on the audience and the request.

Common mistakes to avoid

• Treating VSME as mandatory for every SME.
• Using VSME as a public claim without keeping evidence.
• Starting with the Comprehensive Module when the Basic Module is enough.
• Assuming a VSME report answers a buyer's service-level emissions request.
• Reporting emissions without a clear boundary or methodology note.
• Using estimates without documenting assumptions.
• Changing methods year to year without a change log.
• Publishing broad sustainability claims that go beyond the data.
• Confusing consultant support with independent assurance.

A practical VSME preparation checklist

Before preparing a VSME-aligned report or response, ask:

• Who is asking for the information?
• Is the request legal, customer-driven, lender-driven, investor-driven, or voluntary?
• Will Basic Module information be enough?
• Does the stakeholder need Comprehensive Module information?
• What reporting year and entities are covered?
• Do we have evidence for energy, emissions, water, waste, workforce, safety, and governance data?
• Are emissions calculated using a clear method and factor source?
• Are estimates, exclusions, and assumptions documented?
• Will the output be public, shared privately, or used internally?
• Who reviews and approves the final response?

How Keslio can help

Keslio helps SMEs and suppliers turn sustainability requests into practical reporting workflows. This can include deciding whether VSME is the right structure, preparing a VSME-aligned data request list, organizing evidence, calculating Scope 1, Scope 2, and relevant Scope 3 emissions, drafting methodology notes, and preparing customer-ready responses.

For broader report support, Keslio provides reporting and communications support. For emissions data, Keslio supports GHG emissions calculations. For customer-driven requests, Keslio can help through supplier request support.

Need help with VSME or SME sustainability reporting?

If your team has received a bank, investor, or customer sustainability request, Keslio can help decide whether VSME is the right structure, identify which module is proportionate, prepare the data checklist, and turn the response into a repeatable annual process.