Standard for voluntary sustainability reporting

On 17 December 2024, the European Financial Reporting Advisory Group (EFRAG) submitted a standard for voluntary sustainability reporting by non-capital-market-oriented micro, small and medium-sized enterprises (SMEs) to the European Commission, known as the ‘VSME’ standard.

The standard is a voluntary reporting standard for micro-enterprises and SMEs that do not fall within the scope of the Corporate Sustainability Reporting Directive (CSRD) (Directive (EU) 2022/2464). It is intended to support them in meeting the information needs of banks, investors and their downstream value chain in a standardised form.

Due to the voluntary application of the standard, it is not issued as a delegated act by the European Commission - unlike the ESRS (European Sustainability Reporting Standards), which are mandatory under the CSRD. It has so far only been published in English.

The standard (ESRS VSME) is divided into a ‘Basic Module’ and a ‘Comprehensive Module’ and, at 66 pages, is significantly shorter than the ESRS. It is accompanied by supplementary Basis for Conclusions (VSME).

In 2025, EFRAG will publish a range of support material and organise public events to support the application of the standard.