VSME Standard: Definition & Explanation of the Voluntary ESG Reporting Framework
The VSME Standard (Voluntary SME Standard) is a simplified ESG reporting framework for small and medium-sized enterprises developed by EFRAG. It enables SMEs to provide standardized ESG data and sustainability metrics to financial institutions and corporate clients.
Why was the VSME standard introduced?
Under the CSRD, large enterprises must comply with rigorous ESRS standards. While most SMEs do not fall directly under this scope, the pressure is mounting: banks require data for lending (Green Asset Ratio), and major corporate clients demand it for their supply chain. The standard establishes a unified language for mid-sized companies.
Which modules does the VSME standard comprise?
The VSME standard consists of two modules: the Basic Module and the Expanded Module.
Is the VSME standard mandatory?
As the name suggests, "Voluntary" – non-listed SMEs are not legally obligated. However, a de facto obligation is emerging: banks use it for credit ratings, and large corporate customers increasingly require standardised supplier ESG data.
VSME vs. ESRS
ESRS: Approximately 1,000 data points, highly complex, mandatory for large entities
VSME: Streamlined to the essentials, manageable for SMEs without dedicated sustainability departments