[et_pb_section fb_built=”1″ theme_builder_area=”post_content” _builder_version=”4.27.4″ _module_preset=”default”][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.24.2″ _module_preset=”default” custom_margin=”-104px||||false|false” locked=”off” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_row _builder_version=”4.22.1″ _module_preset=”default” border_width_bottom=”1px” border_color_bottom=”#cecece” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_column type=”4_4″ _builder_version=”4.22.1″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_text _builder_version=”4.27.4″ _module_preset=”default” text_font=”Akrobat-SemiBold|||on|||||” text_text_color=”#7d7168″ hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]IN RESPONSE TO THE GROWING NEED FOR TRANSPARENT SUSTAINABILITY REPORTING, THE EUROPEAN FINANCIAL REPORTING ADVISORY GROUP (EFRAG) HAS DEVELOPED TWO NEW STANDARDS: THE VOLUNTARY STANDARD FOR NON-LISTED SMES (VSME) AND THE EUROPEAN SUSTAINABILITY REPORTING STANDARD FOR LISTED SMES (LSME). THE SUSTAINABILITY REPORT FOR SMES (VSME) IS DESCRIBED IN MORE DETAIL IN THIS ARTICLE.[\/et_pb_text][et_pb_text _builder_version=”4.27.4″ _module_preset=”default” text_font_size=”19px” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n
These two standards are part of the efforts to implement the European Union’s Corporate Sustainability Reporting Directive (CSRD) in order to improve and standardise sustainability reporting<\/a><\/span>\u00a0<\/span><\/a> by small and medium-sized enterprises (SMEs). <\/span><\/p>\n The draft VSME provides a voluntary framework for non-listed SMEs to respond efficiently to sustainability requests from business partners. It aims to increase the transparency and reliability of sustainability reports. <\/span><\/span><\/p>\n [\/et_pb_text][et_pb_text _builder_version=”4.27.4″ _module_preset=”default” custom_margin=”60px||||false|false” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n [\/et_pb_text][et_pb_text _builder_version=”4.24.2″ _module_preset=”default” text_font_size=”19px” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n The VSME is aimed at unlisted companies that are defined as SMEs in accordance with Directive 2013\/34\/EU and do not exceed<\/strong> two of the following three criteria <\/span><\/p>\n LSMEs do not apply to these company sizes, meaning that the voluntary reporting standards of the VSME can be applied.<\/span><\/p>\n [\/et_pb_text][et_pb_image src=”https:\/\/terra-institute.eu\/it\/wp-content\/uploads\/2025\/02\/fig.-standard-di-rendicontazione-per-dimensione-aziendale.jpg” alt=”fig. standard-di-rendicontazione-per-dimensione-aziendale” title_text=”fig. standard-di-rendicontazione-per-dimensione-aziendale” _builder_version=”4.27.4″ _module_preset=”default” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″][\/et_pb_image][et_pb_text _builder_version=”4.27.4″ _module_preset=”default” text_font_size=”19px” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n Fig. 1: Overview of company sizes and the reporting standards that affect them<\/em><\/p>\n *Public Interest Entities (PIEs): Typically includes credit institutions, insurance companies, listed companies and others designated by a member state based on their size, type of business or number of employees. <\/span><\/p>\n [\/et_pb_text][et_pb_text module_id=”massnahmen-unternehmen” _builder_version=”4.27.4″ _module_preset=”default” text_font_size=”19px” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n The VSME consists of three modules: the Basic Module, the Narrative Performance, Actions and Target (PAT) Module and the Business Partners (BP) Module. <\/span><\/p>\n \u00a0<\/span><\/p>\n The Basic Module forms the basic framework of the VSME and sets out general principles for sustainability reporting. It includes basic reporting requirements, such as the presentation of corporate governance, material sustainability practices and their impact on corporate performance. The basic module of the VSME draft is specifically designed for micro-enterprises and does not require a materiality analysis.\u00a0 <\/span><\/p>\n Companies must specify the module used, the application level and their subsidiaries. They must also briefly describe specific strategies for the transition to a more sustainable economy, if available. They must also disclose their total energy consumption, gross greenhouse gas emissions, quantities of pollutants, water consumption and extraction, waste and resource management and social aspects. They can also add qualitative and quantitative information to customise reporting to their specific needs. <\/span><\/p>\n \u00a0<\/span><\/p>\n The PAT module encourages companies to present their sustainability goals, measures and performance in a narrative context and to set clear targets. It expands on the basic module and is intended for companies that already have formal sustainability guidelines but are not subject to CSRD reporting requirements\u00a0. A materiality analysis in accordance with the VSME draft standard is required to disclose relevant sustainability information. Companies must explain how they address material sustainability aspects, including energy efficiency and greenhouse gas reduction measures as well as social aspects, anti-corruption and governance practices. <\/span><\/p>\n \u00a0<\/span><\/p>\n The business partners module emphasises relationships with business partners and their impact on the company’s sustainability performance. It requires disclosures on supply chains, the selection and monitoring of business partners and their involvement in sustainability practices. It expands the disclosures of the Basic Module with additional data relevant to lenders, investors and business partners. Companies must provide information on the transition plan to mitigate climate change, potential financial impacts of climate risks, hazardous waste management and compliance with international standards such as the UN Guiding Principles on Business and Human Rights.<\/span><\/p>\n <\/span><\/p>\n <\/p>\n [\/et_pb_text][et_pb_image src=”https:\/\/terra-institute.eu\/it\/wp-content\/uploads\/2025\/02\/fig.-Opzioni-combinate-per-la-rendicontazione-VSME.jpg” alt=”fig. Opzioni-combinate-per-la-rendicontazione-VSME” title_text=”fig. Opzioni-combinate-per-la-rendicontazione-VSME” src_tablet=”https:\/\/terra-institute.eu\/wp-content\/uploads\/2024\/06\/Kombinationsmoeglichkeiten-Berichterstattung-VSME.jpg” src_phone=”https:\/\/terra-institute.eu\/wp-content\/uploads\/2024\/06\/Kombinationsmoeglichkeiten-Berichterstattung-VSME.jpg” src_last_edited=”on|phone” _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][\/et_pb_image][et_pb_text _builder_version=”4.27.4″ _module_preset=”default” text_font_size=”19px” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n Fig. 2: The four possible combinations for reporting within the VSME<\/em><\/p>\n [\/et_pb_text][et_pb_text module_id=”massnahmen-unternehmen” _builder_version=”4.27.4″ _module_preset=”default” text_font_size=”19px” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n The VSME standard requires companies to assess the severity of the impacts of their activities on the environment and society. Severity is defined by the extent, duration and irreversibility of the impact. Companies must evaluate the potential long-term and short-term impacts of their business activities and disclose this information in their sustainability report. [\/et_pb_text][et_pb_text module_id=”massnahmen-unternehmen” _builder_version=”4.27.4″ _module_preset=”default” text_font_size=”19px” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n The aim of the initial assessment is to capture and evaluate the current state of the company’s sustainability practices and reporting, with a particular focus on the concept of double materiality. This concept requires companies to consider both the impact of their activities on the environment and society and the impact of environmental and social issues on the company itself.<\/span><\/p>\n <\/span><\/p>\n The final report should present the assessment of double materiality, identify gaps and propose measures to close them. It should also include an implementation plan with timeframes and responsibilities for integrating dual materiality into company practices. <\/span><\/p>\n \n General company information: <\/span><\/strong><\/p>\n Governance data:<\/span><\/strong><\/p>\n Environmental data: <\/span><\/strong><\/p>\n Social data:<\/span><\/strong><\/p>\n Supply chain data: <\/span><\/strong><\/p>\n \u00a0<\/span><\/p>\n The sustainability report should be prepared correctly and completely in accordance with the standard and published on the company website to enable transparency and effective evaluation by stakeholders. External assurance is not mandatory for the VSME standard, but is recommended to increase credibility. These measures help companies to avoid regulatory sanctions and strengthen the trust of investors, customers and other stakeholders.<\/span><\/p>\n <\/span><\/p>\n [\/et_pb_text][et_pb_text module_id=”massnahmen-unternehmen” _builder_version=”4.27.4″ _module_preset=”default” text_font_size=”19px” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n The VSME is currently still an EFRAG draft<\/a> . From June, however, it will be revised, adopted by the European Commission, the Parliament and the Council and then published with binding effect.\u00a0 <\/span><\/p>\nSCOPE AND CONTENT OF VSME<\/h2>\n
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STRUCTURE OF THE VSME<\/h2>\n
BASIC MODULE<\/h2>\n
NARRATIVE PERFORMANCE AND TARGET (PAT) MODULE<\/h2>\n
BUSINESS PARTNERS MODULE<\/h2>\n
APPLICATION OPPORTUNITIES OF THE 3 MODULES<\/h2>\n
PRINCIPLE OF DOUBLE MATERIALITY IN THE VSME<\/h2>\n
IMPLEMENTATION STEPS<\/h1>\n
INITIAL ASSESSMENT TAKING INTO ACCOUNT DOUBLE MATERIALITY<\/h2>\n
Extended action plan:<\/h2>\n
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WHAT DATA IS REQUIRED FOR THE VSME?<\/h2>\n
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PREPARATION OF THE SUSTAINABILITY REPORT<\/h2>\n
FUTURE DEVELOPMENTS AND TRENDS<\/h2>\n