VSME - The Official Sustainability Reporting Standard for Non-Listed SMEs in the EU
The Corporate Sustainability Reporting Directive (CSRD) requires large corporations to annually report their sustainability efforts in line with the European Sustainability Reporting Standards (ESRS). This directive has created a ripple effect throughout value chains, as large corporations now need to gather more sustainability data from their suppliers and partners than ever before.
For small- and medium-sized enterprises (SMEs) with large corporate customers, this has posed a challenge. Many SMEs are receiving multiple, often inconsistent, sustainability information requests from different partners, leading to confusion and inefficiencies.
In early 2024, the exposure draft of the Voluntary Sustainability Reporting Standard for SMEs (VSME) was released. The European Financial Reporting Advisory Group (EFRAG) plans to finalize the VSME standard by the end of 2024, offering SMEs a streamlined approach to sustainability reporting.
What Is VSME, and How Will It Impact SMEs?
Currently, non-listed SMEs have no legal obligation to report on sustainability. However, sustainability reporting is increasingly becoming a “license to operate”, with stakeholders expecting greater transparency.
The VSME is a voluntary framework designed to standardize the diverse ESG data requests SMEs receive. By adopting VSME, SMEs can ensure their sustainability reporting meets the expectations of large corporate partners and stakeholders, creating a single, widely recognized reference point for sustainability disclosures.
This framework also aims to offer significant benefits beyond compliance. SMEs that align with VSME are better positioned to access sustainable finance, as investors and lenders gain clearer insights into their sustainability performance. In turn, this transparency could strengthen stakeholder relationships and enhance competitive advantage.
Adopting VSME is not just a reactive measure – it’s a proactive step toward future-proofing operations and staying ahead in a rapidly evolving market.
How esgResilience Can Help
At esgResilience, we’ve been closely following the development of the VSME standards. Our platform is ready to integrate these standards, ensuring our SME customers’ sustainability reports for fiscal year 2024 will be fully aligned with VSME.
By adopting this forward-thinking approach, you’ll not only simplify compliance but also position your SME as a leader in sustainable business practices.
Want to learn more? Contact us today to see how we can support your sustainability journey!
