The new Voluntary Sustainability Reporting Standard: what businesses need to know

Why was the standard introduced?

The standard has two main objectives:

• to help companies outside the scope of mandatory CSRD reporting communicate sustainability information in a structured and proportionate way; and
• to reduce the reporting burden created by multiple ESG questionnaires and information requests from customers, investors and financial institutions.

By standardising sustainability disclosures, the Commission aims to improve access to finance, support better business decision-making and strengthen competitiveness, particularly for SMEs and mid-sized companies.

A framework based on the VSME Standard

The new standard is largely based on the VSME Standard previously recommended by the European Commission, with limited amendments to align it with the revised ESRS. This ensures consistency across the sustainability reporting landscape while maintaining a proportionate approach for smaller businesses.

What does the standard include?

The framework consists of two modules:

Basic Module

The Basic Module covers core sustainability disclosures, including:

• energy use and greenhouse gas emissions;
• pollution, biodiversity and water;
• resource use and waste management;
• workforce information;
• corruption and bribery incidents.

Comprehensive Module

Organisations may choose to provide additional information on topics such as:

• sustainability strategy and business model;
• climate risks and transition plans;
• human rights practices;
• governance and gender diversity.

The value-chain cap: a significant change

A key feature of the regulation is the introduction of the value-chain cap. Under this mechanism, companies subject to mandatory sustainability reporting cannot require businesses with fewer than 1,000 employees to provide sustainability information beyond the disclosures specified in the regulation. Smaller companies also have the right to refuse requests that exceed these limits.

This is expected to reduce the administrative burden on SMEs and improve consistency in ESG information requests across supply chains.

What does it mean for businesses?

The standard is voluntary, but it can help organisations:

• respond more efficiently to customer and investor ESG requests;
• improve sustainability management and risk oversight;
• enhance access to finance;
• build credibility with key stakeholders.

For many companies no longer subject to CSRD reporting, the voluntary standard may become the preferred way to demonstrate sustainability performance without the complexity of full ESRS reporting.

Key dates

Eligible companies will be able to apply the standard once it enters into force, which is expected in autumn 2026, following the expiry of the scrutiny period for the European Parliament and the Council and the publication of the Regulation in the Official Journal of the European Union. The value-chain cap will apply to CSRD reporting companies for financial years beginning on or after 1 January 2027.

How Forvis Mazars can help

Forvis Mazars supports organisations in assessing reporting requirements, implementing sustainability reporting frameworks and responding to evolving stakeholder expectations. Whether you are considering voluntary reporting or preparing for broader ESG reporting obligations, our specialists can help develop a practical and proportionate approach aligned with your business needs.