The Voluntary Sustainability Reporting Standard for non-listed SMEs (VSME) is, as the name suggests, a voluntary ESG reporting framework.

However, SMEs in Europe are increasingly adopting VSME because it offers significant strategic and market benefits, even though it is not legally required under current EU law. VSME is an EU-endorsed ESG framework: recognized by the European Financial Reporting Advisory Group (EFRAG) and aligns with the EU’s sustainability goals, ensuring that your business follows best practices for sustainability reporting.

Here’s why adopting VSME is a smart move for SMEs:
✅ Simplifies ESG reporting—eliminates redundant data requests from investors, banks, and larger customers
💶 Supports access to sustainable finance by providing standardized, credible ESG data.
🔗 Aligns with CSRD-covered supply chains, boosting competitiveness.
🔮 Future-proofs your business against upcoming EU regulations
🤝 Strong market acceptance—VSME was co-created with thousands of SMEs and corporates.

While VSME reporting is not mandatory, it is a cost-effective and practical solution for SMEs to enhance ESG credibility, strengthen stakeholder relationships, and remain competitive in a rapidly changing sustainability environment.

VSME provides SMEs with a practical and streamlined pathway to ESG reporting by reducing complexity and cost. The framework uses standardized templates and ESG indicators that are aligned with the ESRS principles but without the full burden of CSRD’s requirements, such as mandatory double materiality or external assurance.

The Basic module covers essential ESG topics (e.g., energy use, waste, workforce policies), while the Comprehensive module allows for more detailed disclosures, such as climate strategy and risk management. This modular approach enables SMEs to gradually scale their ESG disclosures, improve supply chain positioning, meet investor or lender expectations, and enhance access to green finance — all while preparing for potential future regulatory alignment under CSRD.