What is EFRAG and what is its role in ESG reporting?
EFRAG (European Financial Reporting Advisory Group) is the independent EU advisory body for financial reporting standards, based in Brussels. It developed both the ESRS standards for the CSRD and the VS standard for SMEs. On this basis, the European Commission adopted the VS with Delegated Regulation (EU) 2026/1560 (published on 21 September 2026).
What is the role of EFRAG?
EFRAG (European Financial Reporting Advisory Group) was founded in 2001 and advises the European Commission on developing financial and sustainability reporting standards. It drafts technical standards which are subsequently adopted and published by the European Commission through legislation or official recommendations.
EFRAG's Role in the VS
EFRAG developed the VS standard based on extensive consultations with SME associations, banks and investors. The objective was to create a framework that delivers robust ESG data accepted by large corporations, whilst remaining simple and practical for SMEs to implement. At the end of 2024, EFRAG presented the VSME standard, which the European Commission recommended on 30 July 2025. Building on it, the Commission adopted the Voluntary Standard with Delegated Regulation (EU) 2026/1560, published on 21 September 2026.
Why is EFRAG compliance essential?
Banks, investors and large corporates only recognise EFRAG-compliant reports as reliable ESG data. ESG Lift generates EFRAG-compliant VS reports that are fully auditable, bankable and tailored for all standard supply chain disclosure requests.
What is EFRAG? The EU standardisation body behind VS and ESRS explained simply – and why EFRAG compliance is crucial for SME ESG reporting.