VSME standard recommended by European Comission

VSME article

VSME (Voluntary Sustainability Reporting Standard for Non-Listed SMEs) is the EU’s new voluntary sustainability reporting standard for small and medium-sized unlisted companies. It offers a clear and efficient model for reliable sustainability communication amid increasing reporting demands. VSME is a simplified and effective way to report ESG data in alignment with the CSRD and ESRS frameworks.

A new development is that the EU’s Omnibus Package provides guidance that companies no longer falling within the scope of CSRD can report according to the VSME standard. The Omnibus also proposes that stakeholder sustainability-related information requests should be presented in the VSME format and scope. This ensures consistency in reporting even without a legal obligation.

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What does VSME reporting include?

The standard comes in two formats, allowing companies to choose the one that best suits their needs:

Basic module: The minimum level of reporting, covering general information about the company and its sustainability efforts, as well as selected key figures. A light and easy form for sustainability communication.

Comprehensive module: A broader and enhanced version of the basic level. This version allows the company to present its sustainability work more thoroughly, both in narrative and in figures.

The VSME report is built on the same ESG pillars as CSRD reporting:

Environment (E) – Energy consumption, emissions, waste, water use, resource use, climate impact

Social (S) – Working conditions, occupational safety, diversity and equality, training, stakeholder engagement

Governance (G) – Policies related to sustainability, anti-corruption, transparency, governance structures

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Why adopt VSME?

• Sustainability is now an expectation – companies that report clearly stand out in the market.

• Investors and financial institutions require sustainability data. A well-prepared report strengthens a company’s position in financial markets and improves access to favorable financing.

• Companies face increasing demands from customers and partners – VSME helps your company respond to information requests in a standardized and credible way.

• Collecting and monitoring ESG data now helps companies anticipate regulatory developments, which are very likely to increase.

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VSME and green finance

Sustainability has become a key criterion for accessing financing and favorable terms. Financiers are placing increasing importance on companies’ sustainability profiles. Companies that communicate their sustainability clearly and consistently are seen as more reliable and attractive partners in the financial market.

A well-executed VSME report can:

• Improve access to lower-cost financing, such as through better interest rates

• Enhance eligibility for green or sustainability-linked financing

Under EU financial regulations, banks are expected to increase their Green Asset Ratio (GAR) – the share of green loans. With VSME reporting, a company can more easily demonstrate eligibility for green financing. Many investment funds also require certain sustainability criteria to be met, and VSME reporting can help companies meet these requirements, thereby expanding opportunities for both debt and equity funding.

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Sustainability as a communication and marketing tool

Many companies engage in meaningful sustainability work but fail to communicate it effectively – leaving valuable efforts unnoticed. VSME helps turn this work into reliable and visible content for communication and marketing.

A VSME report can serve as the sustainability section of a company’s website, offering customers and stakeholders an up-to-date and clear view of the company’s sustainability performance in one place.

Using the standardized VSME framework allows companies to present a transparent, comparable, and stakeholder-aligned view of their sustainability work. It also reduces manual effort in responding to information requests and ensures consistency across communication channels.

VSME reporting is particularly suitable for companies that want to stand out and make their sustainability work visible in a credible and lightweight way.

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VSME for internal business development

VSME reporting is not just a communication tool—it’s also a way to develop the business based on data. The indicators tracked through the standard, along with the business descriptions, help identify strengths and areas for improvement.

For example:

• Energy efficiency directly saves money

• A motivated, trained, and healthy workforce boosts productivity

• Good governance is key to successful strategy execution

VSME supports clear reporting of successes and goals—and thus also serves as a management tool.

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How to get started

Sustashift offers various solutions to support companies’ sustainability efforts, including VSME reporting.

For VSME reporting, Sustashift provides:

• Reporting software

• A template to easily compile report content

• Centralized data collection via the software

• Downloadable final report for company use

• Report writing

• We can draft the full report based on materials and current sustainability actions provided by your company

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Interested?

Contact Sustashift and we’ll help you build a clear, credible, and appropriately scaled VSME report for your business. Now is the time to ensure that your sustainability work is also visible to the outside world.

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