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Definition

VSME sustainability reporting standard

The VSME sustainability reporting standard is a voluntary EU framework that helps non-listed micro, small, and medium-sized undertakings give proportionate sustainability information to banks, investors, and corporate customers.

What is the VSME sustainability reporting standard?

VSME is the European Commission's voluntary framework for non-listed SMEs outside mandatory CSRD reporting. Keslio's VSME guide explains its disclosures and preparation steps. Unlike ESRS for companies in CSRD scope, VSME has no legal authority.

Why does VSME matter to you?

Banks, investors, or larger customers may accept VSME information for a substantial part of their request instead of asking the same questions again. A Mexican supplier can use it voluntarily for an EU business partner, but it does not replace Mexican law or customer-specific fields.

How does VSME work?

Start with Basic Module disclosures B1 to B11. Add applicable Comprehensive Module disclosures C1 to C9 when the recipient needs more detail. Paragraph 6 makes the Basic Module a prerequisite. For annual updates, paragraph 16 aligns reporting with the financial-statement period.

What mistakes should you avoid?

  • Treating VSME as a mandatory filing for every SME.
  • Starting the Comprehensive Module without completing the Basic Module.
  • Assuming a VSME report answers every customer-specific portal field.

Is VSME the same as ESRS?

No. VSME is proportionate and voluntary for SMEs outside CSRD. ESRS has legal force for companies in scope.

Can a company outside the EU use VSME?

Yes, as a voluntary format if a business partner accepts it. Confirm the company's local duties and the recipient's exact request separately.

What should you send when a customer asks for VSME?

Send the selected module, reporting period, companies and sites covered, completed disclosures, source records, and any estimates or omissions. Answer additional portal questions separately.

Example

Hypothetical Mexico example: Suppose a pharmaceutical packaging supplier in Mexico has an average headcount of 78 and voluntarily uses VSME for an EU customer's request. It selects the Basic Module. Paragraph 40 requires the employee turnover rate at 50 or more employees. During the reporting period, 12 employees leave. Using the formula in Annex II paragraph 118, 12 leavers / 78 average employees x 100 = 15.38%, so the supplier reports a 15.4% employee turnover rate.

The customer also asks for product-level recycled-content records, which the company-level VSME response does not answer. The supplier provides those records separately and does not imply that completing VSME equals customer approval.

Where it comes up

VSME scope for SMEs outside CSRD and voluntary legal statusCommission Recommendation (EU) 2025/1710, Annex I, paragraphs 3-4, checked 2026-08-20VSME Basic Module disclosures B1-B11 and prerequisite for the Comprehensive ModuleCommission Recommendation (EU) 2025/1710, Annex I, paragraphs 5-6 and 21-24, checked 2026-08-20VSME Comprehensive Module disclosures C1-C9 for banks, investors, and corporate clientsCommission Recommendation (EU) 2025/1710, Annex I, paragraphs 44-45, checked 2026-08-20

Related terms

Sustainability Reporting

Sustainability reporting is the process of publishing evidence-backed information about a company's environmental, social, and governance impacts, risks, opportunities, policies, targets, and performance for a defined period and business boundary.

ESRS (European Sustainability Reporting Standards)

ESRS tell companies reporting under the CSRD which sustainability information to disclose and how to document material impacts, financial risks, governance, strategy, policies, actions, metrics, and targets.

Materiality

Materiality is the test a company uses to decide which sustainability topics matter enough to manage or report because they could affect its finances, reflect significant impacts on people or the environment, or both.

ESG

Environmental, social and governance (ESG) groups the evidence a company provides about its environmental effects, treatment of people and business oversight when investors, customers or rating providers ask.

Sources

  • European Commission, Official Journal of the European Union

    VSME scope, voluntary status, two-module structure, disclosure references, annual reporting rule, the paragraph 40 employee threshold, and the Annex II paragraph 118 turnover formula

    2026-08-20

  • EFRAG

    Delivery of VSME technical advice, intended users, and supporting materials for the Basic and Comprehensive Modules

    2026-08-20

Last verified 2026-08-20

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VSME sustainability reporting standard Definition | Keslio