
Sustainability
For companies to succeed in the 21st century, sustainability and social responsibility must be at the heart of their business model.
At the request of the European Commission, EFRAG has prepared a new sustainability reporting standard for non-listed SMEs (the so-called VSME). This standard is intended to help SMEs simplify sustainability reporting, gain better access to lenders, investors and customers by standardising the requirements for ESG data (environmental, social and governance data) that these companies can voluntarily track and disclose to third parties
The new standard is intended for companies that are not within the mandatory scope of the Sustainability Reporting Directive (CSRD 2022/2464), which has been transposed into legislation in Slovakia by an amendment to the Accounting Act No. 431/2002 Coll. Due to its voluntary nature, the VSME standard is not issued as a delegated act by the European Commission, unlike the ESRS (European Sustainability Reporting Standards), which are mandatory for large companies (with a turnover above EUR 50 million, net assets above EUR 25 million and number of employees above 250) in the scope of the CSRD. EFRAG's work on the VSME is based on the European Commission's September 2023 SME aid package, which refers to this specific standard as a measure to support SMEs in accessing sustainable finance. In 2025, EFRAG will publish a range of support materials and organise public events to promote the use of the VSME standard by firms.
The VSME is designed to support the availability of simple but relevant data related to sustainability. It aims to reduce the burden on SMEs currently facing multiple uncoordinated data requests and, if supported by appropriate online platforms and tools, will offer new business and funding opportunities as well as additional insight for management of reporting companies
VSME offers a modular approach. It is structured in two main modules can be combined with each other. The VSME standard is divided into a "Core Module" and a "Comprehensive Module" and at 66 pages is considerably shorter than the ESRS standard. Firms do not need to perform a double materiality assessment. The double materiality assessment has been replaced by the "disclose if relevant" principle.
The first core module is designed primarily for micro-enterprises and also serves as a minimum requirement for other SMEs. It consists of eleven ESG data areas: general and basic information (B1 and B2) and basic metrics (B3 to B11).
B1 - Basis for preparation
B2 - Description of practices, policies and future initiatives for the transition to sustainable business
B3 - Energy and greenhouse gas emissions
B4 - Air, water and soil pollution
B5 - Biodiversity
B6 - Water consumption
B7 - Resource use, circular economy and waste management
B8 - Labour force - general characteristics
B9 - Workers - health and safety
B10 - Workers - pay, collective bargaining and training
B11 - Convictions and fines for corruption and bribery
The second, comprehensive module sets out, in addition to the B1-B11 disclosures, the disclosures likely to be required by banks, investors and corporate clients of the firm over and above the core module. It also includes information needed by business partners to assess the risk profile of the sustainability of the enterprise, e.g. as a (potential) supplier or (potential) banking client. The application of the core module is a prerequisite for the application of the comprehensive module. The module includes an additional nine ESG data areas, the reporting of which presupposes a higher level of ESG in the firm, e.g. related to the size of the firm.
C1 - Strategy - business model and sustainability
C2 - Description of practices, policies and future initiatives for the transition to sustainable business
C3 - Greenhouse gas emission reduction and climate transition targets
C4 - Climate risks
C5 - Other (general) characteristics of the workforce
C6 - Human rights policies and processes
C8 - Revenue from certain controversial sectors
C9 - Gender diversity ratio in the governing body
Access the VSME Standard together with EFRAG's cover letter, cost-benefit analysis and summary of feedback from the public consultation via a press release on EFRAG's website.
By adopting the VSME standard, SMEs can not only increase their transparency and access to finance, but also demonstrate accountability and foresight in a competitive marketplace. The implementation of VSME brings a number of significant benefits for SMEs:
SMEs are defined in EU 2003/361. Recommendation The main factors determining whether an enterprise is an SME are the number of employees and turnover or the total balance sheet total.
Category of enterprise | Number of employees | Turnover | Total balance sheet amount |
Medium | < 250 | ≤ EUR 50 million | ≤43 million |
Small | < 50 | ≤10 million | ≤ EUR 10 million |
Micro | < 10 | ≤ EUR 2 million | ≤ EUR 2 million |
The table below shows the thresholds for each SME category
More detailed information on the definition of SMEs can be found in the European Commission's guide.
Are you interested in more information and would you like to request a service proposal from us? Fill our inquiry form via button below.
This website uses cookies.
Some of these cookies are necessary, while others help us analyse our traffic, serve advertising and deliver customised experiences for you.
For more information on the cookies we use, please refer to our Privacy Policy.
This website cannot function properly without these cookies.
Analytical cookies help us enhance our website by collecting information on its usage.
We use marketing cookies to increase the relevancy of our advertising campaigns.