Applying VSME: voluntary sustainability reporting in practice

Sustainability reporting requirements across Europe are evolving rapidly following changes to mandatory reporting thresholds introduced under the Omnibus I simplification package. As a result, voluntary sustainability reporting is becoming increasingly relevant for organisations that fall outside the scope of the Corporate Sustainability Reporting Directive (CSRD), particularly small and medium-sized enterprises (SMEs).

SMEs account for almost all businesses operating within the European Union and play a critical role in economic growth, employment and innovation. In recognition of this, the European Commission is actively encouraging companies to begin using the Voluntary Sustainability Reporting Standard for SMEs (VSME) ahead of the introduction of a formal voluntary standard in 2026, which will build on the VSME framework.

To help organisations navigate this evolving landscape, our sustainability specialists have developed a practical guide that explains the background to the VSME standard, outlines its core components and provides clear guidance on how to approach implementation in a proportionate and effective way.

VSME standard: purpose and structure

The VSME standard provides a simplified, flexible sustainability reporting framework for organisations that are not subject to mandatory reporting obligations. It aims to balance transparency with proportionality, making sustainability reporting accessible without imposing unnecessary administrative burden.

The framework is structured around two reporting modules:

• The basic module, which sets out a core set of sustainability disclosures intended as a minimum reporting baseline
• The comprehensive module, which is optional and includes additional information that may be requested by lenders, investors or key business partners

Organisations can apply either module depending on their size, maturity and stakeholder expectations.

Key considerations when applying the VSME standard

A critical first step is assessing an organisation’s current ESG maturity. This assessment helps determine whether reporting should be limited to the basic module or extended to include elements of the comprehensive module.

Successful application of the VSME standard also depends on establishing reliable data collection and governance processes. Companies may wish to draw on tools and implementation guidance developed by EFRAG to support consistency and data quality throughout the reporting process.

Beyond compliance, the VSME standard serves as a strategic tool to embed sustainability into broader business transformation and value-creation initiatives. While publication of a sustainability report is not mandatory under VSME, voluntarily sharing progress, targets and commitments can strengthen transparency and credibility with stakeholders. Some organisations may also choose to seek independent assurance to provide additional confidence in their disclosures.

What happens next?

The amended CSRD “Content” Directive is expected to be published in the Official Journal of the European Union in early 2026 and will enter into force shortly thereafter. This will trigger a four-month period during which the European Commission is expected to adopt a delegated act introducing a voluntary sustainability reporting standard.

While this future standard will be based on the VSME framework, it may evolve to reflect updates to the European Sustainability Reporting Standards (ESRS) applicable to companies within the revised scope of CSRD. Organisations adopting VSME now should therefore remain alert to future alignment requirements.

Download the guide

Our complete guide provides detailed analysis, practical insights and implementation considerations for organisations considering voluntary sustainability reporting under VSME.

Download the guide to explore the standard in more depth.