July 30: EU Commission adopts VSME standard as ESG reporting recommendation for SMEs.
VSME (Voluntary Sustainability Reporting Standard for non-listed Micro, Small and Medium-sized Enterprises) was developed by EFRAG, which is the European Commission’s technical advisor on sustainability reporting. It was submitted to the Commission for approval in December. VSME is designed for SMEs to make it easier for companies to respond to data requests from business partners, investors, and banks. This applies to companies that are not covered by CSRD.
The VSME standard consists of a basic module and an extended module. The basic module is aimed at all SMEs and covers 11 key sustainability issues. These are CO₂ emissions, working environment, and anti-corruption. The extended module adds nine additional points that are often requested by banks and investors. Companies can start with the basic module and then decide whether they want to continue with the extended module.
In EFRAG’s press release, Patrick de Cambourg, Chairman of EFRAG’s Sustainability Reporting Board, states. “With today’s recommendation, the Commission recognizes the crucial role of small and medium-sized enterprises in the economy. The recommendation reflects the VSME standard developed by EFRAG, which offers a robust but flexible framework that is both technically sound and easy to apply. It strikes the right balance between market relevance and proportionality. We expect banks, investors, and business partners to refer to the VSME key figures in their questionnaires to avoid uncoordinated data requests.”
ESG365 are happy for the decision
ESG365 has been working with the VSME standard since EFRAG submitted it for final approval, and their software is built around this standard. The company’s founder and CEO, Per Ørum, is delighted with the adoption. “It’s good that a single regime for ESG reporting is now being created. We have software ready to help companies prepare ESG reports based on the new standard. We have already produced the first reports using the VSME standard, and it is straightforward and, not least, affordable for most small and medium-sized enterprises.”
The current VSME standard applies to all companies with up to 250 employees. For companies with up to 1,000 employees, the European Commission will base it´s standard on VSME. However it is still unclear exactly what this will look like.
Read more in the press releases from EFRAG and the EU Commission.
Artikel af Article by Victoria Ørum, Communications Manager, ESG365.