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.

Last updated: September 30, 2026

Create a VSME-structured Passport See an example Passport

Our wizard is built against the EFRAG VSME draft (v1.3.0, June 2026). The standard's legal text is now final as Commission Delegated Regulation (EU) 2026/1560 — whether the final Basic/Comprehensive module structure differs from that draft has not yet been individually re-checked. This page is a summary for SMEs, not legal advice.

2026 update: VSME and the Voluntary Standard

The European Commission adopted its Voluntary Standard for smaller companies on 3 July 2026. It was published as Delegated Regulation (EU) 2026/1560 on 21 September 2026 and entered into force on 24 September 2026. You can use the standard voluntarily now; what waits for financial years beginning on or after 1 January 2027 is the value-chain cap — see “Where the standard stands” below. It is based on the standard adopted under the 2025 VSME Recommendation; the two are not necessarily identical. This guide keeps the name “VSME” because that is still the name of that Recommendation and of EFRAG's Digital Template, XBRL Taxonomy and converter, which EFRAG is updating for the new standard, with updated materials scheduled for Q4 2026.

The short version

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, EU law caps what a CSRD reporter may require for its own CSRD reporting, from financial years beginning 1 January 2027 and once their Member State has transposed the underlying directive — close to, but not identical to, the Basic Module. See our value-chain cap guide for the exact scope and conditions.
EcoDiligence collects the Basic Module by default, so a free ESG Passport answers most of what an in-scope buyer is entitled to ask — Pro reaches two further cap items (a workforce grievance-channel Yes/No, and what a code of conduct covers if you have one); a few others the cap can reach aren't fully collected at any tier yet.

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.

Where the standard stands, as of September 30, 2026: on 3 July 2026 the European Commission adopted the delegated act that sets out this standard, alongside the revised European Sustainability Reporting Standards. Both went before the European Parliament and the Council for a scrutiny period and have since cleared it: the voluntary standard was published as Commission Delegated Regulation (EU) 2026/1560 in the Official Journal on 21 September 2026 and has been in force since 24 September 2026. Its legal text is therefore settled, and an SME can use the standard voluntarily now. What waits for financial years beginning on or after 1 January 2027 is the value-chain cap: a CSRD reporter only has to observe its ceiling from then, with early adoption for FY2026 open since the act is in force. The separate legal mechanism that caps what a CSRD-reporting buyer can require from a small supplier has been in force at EU level even longer — since 18 March 2026, though as a directive it still needs each Member State's own transposition — see our value-chain cap guide for that part, including why the cap's exact list is not simply this standard's Basic Module. You may also see the standard abbreviated, as EFRAG's own Digital Template page does in the phrase “Voluntary Standard (VS) of the European Commission”; the Commission's release calls it “the voluntary reporting standard”. EFRAG uses the abbreviation; the Commission's release does not, and EFRAG's tools still carry the VSME name.

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-based 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.

For a buyer's-eye view of the same list, see our supplier ESG data checklist — the practical minimum a procurement team typically asks an SME supplier for first.

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. For its own CSRD reporting, from financial years beginning 1 January 2027 and once the buyer's Member State has transposed the underlying directive, EU law separately caps what a CSRD reporter may require from an SME supplier to a specific list close to, but not identical to, the VSME Basic Module — 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.
SECR is the UK's own energy and carbon disclosure regime, and worth knowing if you are a British supplier. Being outside the EU does not put you outside this demand: what matters is who your customer is, not where you sit. If they are an EU-based CSRD reporter, their request is driven directly by CSRD and your value-chain data is what they need — VSME is the proportionate answer. If the customer is UK-based, the driver is more often their own net-zero commitment or ISSB-based reporting than CSRD. Either way the answer looks the same; only the reason differs.

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-structured report

With a complete Passport: VSME Basic — strong (18 of 19 disclosures, fully or in part). Structural estimate for a complete Passport, not a compliance or audit score. How we map frameworks

One answerHeating and vehicle fuelsAsked once in the Passport, turned into Scope 1 emissions.

VSME B3

SEDG E1.1SEDG and ASEDG

IFRS S2 §29(a)

AASB S2 (ASRS)based on IFRS S2

The same Scope 1 figure serves each of these requirements; you answer the fuel questions once.

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 the VSME Digital Template in Excel — for EFRAG's official XBRL converter — 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.

Looking for software to pre-fill and maintain your VSME reporting data? See EcoDiligence VSME reporting.

Frequently asked questions

No. VSME is a voluntary standard published by EFRAG. What makes it matter in practice is demand: banks, investors, and large CSRD-reporting customers increasingly ask SMEs for structured ESG data, and VSME is the shared, proportionate format that keeps those requests consistent instead of every buyer inventing their own questionnaire.

The Basic Module is the entry-level set of disclosures most SMEs start with — general company information plus core environmental, workforce, and governance data points. The Comprehensive Module sits on top and adds more detailed disclosures such as strategy, GHG-reduction targets, transition topics, and additional workforce and business-conduct information. The Comprehensive Module is voluntary — a buyer's own commercial or contractual terms (a tender, an onboarding form, a code of conduct) can always ask for whatever it wants, cap or no cap. The one thing the value-chain cap changes: for suppliers above 10 employees, its Annex II reaches several Comprehensive-level items — at least a code-of-conduct/human-rights-policy disclosure and confirming whether a workforce grievance channel exists, with our source pointing to more we haven't each verified — when the request is a CSRD reporter's own in-scope CSRD reporting. Outside that specific case, the cap does not force disclosure of Comprehensive-level items, though nothing stops a buyer asking anyway. See our value-chain-cap guide for the conditions.

No. The Basic Module was designed so an SME can answer it directly from information the business already has — energy bills, headcount, and a few policy questions. EcoDiligence walks you through each data point, applies the correct country grid factor to your electricity use automatically, and produces the report for you.

When a large company reports under the CSRD and asks an SME supplier for ESG data for that CSRD reporting, EU law caps what it may require to a specific datapoint list — the value-chain cap, set out in Commission Delegated Regulation (EU) 2026/1560's Annex II. That cap only has to be observed for financial years beginning on or after 1 January 2027, once the buyer's EU Member State has transposed the underlying directive into national law, and it does not reach a buyer's ordinary commercial, procurement, or contractual requests — only requests for the buyer's own CSRD reporting. Where it applies, the list is close to, but not identical to, the VSME Basic Module: for suppliers above 10 employees it also reaches several items usually associated with the Comprehensive Module. A standards-based Passport answers most of what an in-scope CSRD-reporting buyer is entitled to ask; our value-chain-cap guide names the exceptions and the conditions explicitly.

IFRS S2 (issued by the ISSB) is a climate-specific global disclosure baseline; VSME is a broader SME sustainability baseline that spans environment, social, and governance topics. They overlap on climate and emissions. EcoDiligence maps the data you enter once to the framework badges relevant to your country of operation, so a single Passport can speak to both.

A shareable public ESG Passport, a branded PDF, and machine-readable exports — the EFRAG VSME Digital Template (Excel), which EFRAG's official converter turns into XBRL — all generated from the same answers. Everything is self-reported and clearly marked as not independently assured.

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, built on the EFRAG VSME Basic Module with optional IFRS S2 climate inputs. Content is not independently assured and does not constitute compliance, certification or an audit.

One VSME-structured Passport for every buyer request

Free, no consultant, ~10 minutes. Add the Comprehensive layer only if and when your stakeholders ask.

Create free Passport What buyers can ask SMEs