Regulatory Framework · VSME
The VSME standard, explained for SMEs
VSME is the voluntary EFRAG standard that lets small and medium enterprises answer ESG requests from buyers, banks, and investors in one consistent format. Here is what it covers, how its two modules differ, and how to produce a VSME-aligned report without hiring a consultant.
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Based on the current EFRAG VSME standard (v1.3.0, June 2026). This page is a summary for SMEs, not legal advice.
- VSME stands for the Voluntary SME standard, published by EFRAG (the body behind the EU's sustainability standards).
- It is voluntary — you adopt it because it is the format your buyers, banks, and investors recognise, not because a law compels an SME to.
- It has two parts: a Basic Module most SMEs start with, and an optional Comprehensive Module that adds depth.
- For SMEs supplying large EU companies, the Basic Module is the proportionate scope a CSRD-reporting buyer should request.
- EcoDiligence collects the Basic Module by default, so a free ESG Passport already answers what most buyers are entitled to ask.
What is the VSME standard?
The VSME (Voluntary SME) standard is a sustainability-reporting framework created by EFRAG specifically for small and medium enterprises. It exists to solve a very concrete problem: SMEs are increasingly asked for ESG information — by the large companies they supply, by their banks when they seek financing, and by investors — but every requester used to arrive with a different spreadsheet. VSME replaces that chaos with one common, proportionate vocabulary.
Crucially, VSME is voluntary. An SME is not legally required to adopt it. What gives it weight is the demand side: the framework is designed to be the reference an EU company reporting under the Corporate Sustainability Reporting Directive (CSRD) uses when it needs sustainability data from its value chain. Speaking the VSME “language” means you can answer most requests once and reuse the same answers everywhere.
Who is the VSME standard for?
VSME is aimed at any non-listed small or medium enterprise that needs to share ESG data, typically because:
- a larger customer has sent an ESG or sustainability questionnaire as part of procurement or supplier onboarding;
- a bank or lender is asking for sustainability information as part of a financing or loan-review process;
- an investor or acquirer wants a structured view of the company's ESG position; or
- the business simply wants a credible, standards-aligned ESG profile to differentiate itself.
Very small businesses are explicitly accommodated: several disclosures do not apply to micro-entities (broadly, ten employees or fewer), so the reporting burden scales down with the size of the company.
The two modules: Basic vs Comprehensive
The standard is deliberately layered so an SME only does as much as its situation requires.
Start here
Basic Module
The entry-level set of disclosures most SMEs complete. It covers general company information plus core data points across environment, workforce, and governance. This is the module a CSRD-reporting buyer should stay within when requesting data from an SME supplier.
Optional depth
Comprehensive Module
An additional layer for SMEs with more demanding stakeholders — larger lenders, investors, or buyers asking for strategy and targets. It adds disclosures such as sustainability strategy, GHG-reduction targets, transition topics, and more detailed workforce and business-conduct information. Always optional; never compellable from a supplier.
What VSME asks you to disclose
At the Basic level, the standard groups its disclosures into a handful of familiar areas. Exact data points depend on the company, but broadly:
- General information — who the company is, what it does, and the basis on which it is reporting.
- Environment — energy use and greenhouse-gas emissions (Scope 1 and Scope 2), plus, where relevant, pollution, water, waste and resource use, and biodiversity.
- Social / workforce — headcount and workforce characteristics, health and safety, and related people metrics.
- Business conduct / governance — core policies and governance basics such as anti-corruption and codes of conduct.
EcoDiligence turns each of these into a plain-language wizard question and does the calculations for you — see the Methodology page for exactly how Scope 1 and Scope 2 emissions and the country grid factors are derived.
VSME vs CSRD vs ISSB — how they fit together
These acronyms are often confused. A quick orientation:
- CSRD is the EU directive that requires large companies to report sustainability information about themselves and their value chain. It is the source of demand that reaches SMEs.
- VSME is the proportionate, voluntary standard an SME uses to answer that demand. EFRAG guidance treats the VSME Basic Module as the ceiling for what a CSRD reporter should request from an SME supplier — the value-chain cap.
- IFRS S2 / ISSB is a separate, climate-specific global baseline. It overlaps VSME on emissions and climate topics but is narrower in subject and global rather than EU in origin.
You do not choose between them so much as map to whichever your stakeholders recognise. A single EcoDiligence Passport attaches the framework badges relevant to your country of operation from one set of answers.
How to produce a VSME-aligned report
A guided wizard, not a blank template
Answer plain-language questions about your business. The Basic Module is collected by default — no need to read the standard cover to cover.
Country-aware calculations
Your electricity use is converted to Scope 2 emissions with the correct national grid factor automatically, with the source named in the PDF.
Add depth on your terms
Need the Comprehensive layer? The Pro plan adds optional VSME Comprehensive and IFRS S2 transition topics — always your choice.
Shareable Passport, PDF & data exports
Get a public URL, a branded PDF, and machine-readable exports (VSME Digital Template in Excel + XBRL) from the same source of truth.
Create your free Passport — most SMEs finish the Basic Module in under ten minutes and can share the link the same day. See Pricing for what the Free and Pro plans include.
Frequently asked questions
This page summarises the current EFRAG VSME framework for orientation only. It is not legal advice and does not create any rights or obligations. The standard is voluntary and its wording may change; always check the official text at efrag.org. EcoDiligence ESG Passports are self-reported summaries structured for ESG disclosure workflows. Content is not independently assured. Information aligned with EFRAG VSME and IFRS S2 (ISSB) frameworks does not constitute formal compliance or certification.
One VSME-aligned Passport for every buyer request
Free, no consultant, ~10 minutes. Add the Comprehensive layer only if and when your stakeholders ask.