VS Standard: Definition and Explanation of the ESG Reporting Framework
The VS Standard (Voluntary SME Standard) is a simplified reporting framework for small and medium-sized enterprises developed by EFRAG. It enables SMEs to provide standardised ESG data to banks and corporate clients, streamlining their ESG reporting.
Why was the VS standard introduced?
Large companies are required to comply with strict ESRS standards under the CSRD. Although most SMEs do not fall directly under these regulations, the pressure is real: banks require data for lending (Green Asset Ratio), and major corporate clients demand it for their supply chains. The standard establishes a unified language for mid-market businesses.
Which modules does the VS standard include?
The VS standard consists of two modules: the Basic Module and the Expanded Module.
Is the VS standard mandatory?
As the name implies - "Voluntary" - legally, non-capital market-oriented SMEs are under no statutory obligation. However, a de facto obligation is emerging: banks utilise it for credit ratings, and large corporate clients increasingly demand standardised ESG supplier data.
VS vs. ESRS
ESRS: Approx. 1,000 data points, highly complex, mandatory for large corporations
VS: Streamlined to the essentials, manageable for SMEs without a dedicated sustainability department