VSME/VS standard: definition, modules and status of the future voluntary standard (VS)

The VSME/VS standard (Voluntary Sustainability reporting standard for non-listed Micro-, Small and Medium-sized Enterprises) is a European sustainability reporting framework designed for unlisted small and medium-sized enterprises. Developed by EFRAG, it gives SMEs and micro-enterprises a common, voluntary framework for disclosing environmental, social and governance information – without these companies being subject to the obligations of the CSRD.

Its guiding principle can be summed up in one sentence: legally voluntary, often commercially necessary. No law requires a VSME/VS report to be produced, but in practice a customer, a bank or a call for tenders may ask for the information it covers.

What is the VSME/VS standard?

The VSME/VS is a voluntary sustainability reporting standard intended for companies that fall outside the mandatory scope of the CSRD. It was drafted by EFRAG – the technical body that advises the European Commission on reporting standards – and submitted to the Commission on 17 December 2024.

In practical terms, it sets out an organised list of disclosures on ESG topics: energy consumption and greenhouse gas emissions, pollution, water, waste, workforce, health and safety, training and business ethics. Europe’s stated aim is twofold: to give SMEs a single language for responding to the growing number of ESG requests, and to make it easier for them to access sustainable finance.

The three ESG pillars covered by the VSME/VS

The VSME/VS does not follow the same logic as the ESRS, which are mandatory for large companies subject to the CSRD. To see how these frameworks relate to one another, read our comparison of the VSME/VS with the CSRD, ESRS, GRI, EcoVadis and ISO 26000.

Who is the VSME/VS for?

The VSME/VS is aimed primarily at unlisted SMEs and micro-enterprises that fall outside the mandatory scope of the CSRD. This group now makes up the vast majority of European companies: they have no legal obligation to carry out sustainability reporting, but receive a growing number of requests from their partners.

This scope has in fact widened. The so-called “Omnibus I” directive raised the CSRD thresholds: following the reform, the only companies still subject to the obligation are those exceeding two cumulative thresholds – more than 1,000 employees and net turnover of more than €450 million. Many companies previously in scope therefore fall outside the mandatory regime and are turning to voluntary reporting along VSME/VS lines. The voluntary standard (VS), for its part, is open to any company outside the mandatory scope, with no size ceiling (Article 2(1) of the delegated regulation). The 1,000-employee threshold defines something else: the companies protected by the value chain cap (Article 1).

Not sure which side of the line you are on? Our decision tree “Does the VSME/VS apply to me?” helps you decide in just a few questions.

Voluntary, not mandatory: what this means

To be clear: on 8 November 2026, nothing requires an SME to produce a VSME/VS report. There is:

no penalty for not publishing;
no mandatory filing with a register or public authority;
no statutory deadline to meet.

This voluntary nature is the main source of confusion. “Voluntary in law” does not mean “optional in practice”. A client company subject to the CSRD may include a request for ESG information in its purchasing process; a bank may slip one into a loan application. The VSME/VS then becomes a way of responding in a standardised manner, rather than filling in a different questionnaire for each counterparty. We explain this distinction in detail in the article “Is the VSME/VS mandatory?”.

The structure of the standard: Basic Module (B1 to B11) and Comprehensive Module (C1 to C9)

The VSME/VS is organised into two modules. A company applies either the Basic Module alone, or the Basic Module plus the Comprehensive Module. The Basic Module is a prerequisite: the Comprehensive Module cannot be produced without it.

Two modules: the Comprehensive Module adds to the basic core

The Basic Module, the common core for all companies applying the VSME/VS

The Basic Module comprises 11 disclosures, numbered B1 to B11. It is the common core: every company applying the VSME/VS, whatever its size, publishes at least this module. It covers the ESG fundamentals, from the basis for preparation of the report to convictions for corruption, including energy, emissions, water, waste and workforce.

The Basic Module is therefore not reserved for the smallest businesses: it forms the common core for all companies applying the standard.

The Comprehensive Module, which adds to the Basic Module

The Comprehensive Module adds 9 further disclosures, numbered C1 to C9. It goes deeper into certain topics expected by the most demanding counterparties – banks, investors, large contracting customers: strategy, emission reduction targets and climate transition, climate risks, human rights, additional workforce characteristics and the gender ratio in the governance body.

An important point about the figures: EFRAG publishes no official total of “datapoints”. The numbers in circulation (56, 60, 147…) are third-party counts, which depend on the level of granularity adopted in the digital template and the XBRL taxonomy. The only verifiable structure is this: 11 disclosures B1 to B11, 9 disclosures C1 to C9. To choose between the two modules in practice, see our method for applying the VSME/VS in SMEs.

Do you have 10 employees or fewer?

The delegated act of 3 July 2026 lightens the Basic Module for you: energy consumption and greenhouse gas emissions (B3), water withdrawal and consumption (B6), and the application of circular economy principles and waste tonnages (B7) become optional — the text marks them ‘voluntary for undertakings with 10 employees or fewer’. These same disclosures are also excluded from the value chain cap: a contracting customer therefore cannot request them from you on that basis.

No double materiality and no mandatory audit: the “if applicable” principle

The VSME/VS was designed to remain accessible to an SME. It differs from the mandatory ESRS on three key points:

No required double materiality assessment. Whereas the CSRD requires large companies to assess both the company’s impact on the environment and the effect of sustainability matters on its finances, the VSME/VS does not require this exercise.
No mandatory audit or third-party verification of a voluntary report. A company may nevertheless choose to have its report independently assured; a chartered accountant or a statutory auditor can then offer a voluntary assurance engagement. We expand on this point in the pillar page “The VSME/VS, an engagement for accounting firms”.
The “if applicable” principle. Information that is not relevant to the company’s business does not have to be filled in artificially. The report reflects the company’s reality, with no invented data and no greenwashing.

Where does the text stand? Published in the Official Journal of the EU on 21 September 2026 (Delegated Regulation (EU) 2026/1560), it has been in force since 24 September 2026; each step (transmission to the Council, right of objection, publication) is dated on our regulatory watch.

VSME/VS and VS: two related but distinct instruments

This is the point that causes the most confusion today. One sometimes reads that “the VSME/VS has been renamed VS”. On 8 November 2026, this statement is premature: it is better to speak of two related but distinct instruments, one of which extends the other.

VSME/VS and VS: two related but distinct instruments

VSME/VS: EFRAG standard endorsed by Recommendation (EU) 2025/1710 of 30/07/2025

The VSME/VS as we know it today is the standard developed by EFRAG, which the European Commission endorsed through Recommendation (EU) 2025/1710 of 30 July 2025 (document C(2025) 4984 final). A recommendation is a soft law instrument: it is non-binding within the meaning of Article 288 TFEU. It invites Member States and market participants to rely on the VSME/VS, but does not impose it. It was the reference text for voluntary SME reporting until 23 September 2026: Delegated Regulation (EU) 2026/1560 of 3 July 2026 replaces it, and its recital 5 provides that from its entry into force – on 24 September 2026 – the Recommendation “should be considered as no longer producing legal effects”. Companies already applying the VSME will have almost nothing to change: the amendments made to the text have been kept to a minimum, precisely to ensure this continuity.

VS: voluntary standard adopted on 03/07/2026, published in the OJEU on 21/09/2026, in force since 24/09/2026

The voluntary standard (“VS”) is the next step. Following a public consultation held from 6 May to 3 June 2026, the European Commission adopted a delegated act (C(2026) 5011) on 3 July 2026. This act was transmitted to the European Parliament and the Council for the review period (scrutiny), then published in the Official Journal of the European Union on 21 September 2026 as Delegated Regulation (EU) 2026/1560. It has been in force since 24 September 2026 (Article 4); the value chain cap it sets (Article 3) applies to financial years beginning on or after 1 January 2027.

Note: the EU texts refer to a voluntary (reporting) standard, and the enacting terms of the delegated act do not define the acronym. “VS” is nevertheless now used by EFRAG, by the Autorité des normes comptables (ANC, the French accounting standards authority) and by the Portail RSE (the French government’s CSR portal) of the Ministry of the Economy, which refers to “la VS (ex-VSME)” (the VS, formerly VSME). We track each step of this timeline, dated and sourced, in our VSME/VS and VS regulatory watch.

Legal status – as of 8 November 2026

VSME/VS: EFRAG standard submitted on 17/12/2024, endorsed by Recommendation (EU) 2025/1710 of 30/07/2025. A soft law (non-binding) text which has had no legal effect since 24/09/2026, the date of entry into force of Delegated Regulation (EU) 2026/1560, which replaces it (recital 5).
VS (voluntary standard): delegated act C(2026) 5011 adopted on 03/07/2026, published in the OJEU on 21/09/2026 as Delegated Regulation (EU) 2026/1560. In force since 24/09/2026; value chain cap applicable to financial years beginning on or after 01/01/2027.
Post-Omnibus CSRD scope: obligation for companies with more than 1,000 employees and more than €450 million in net turnover (Directive (EU) 2026/470 of 24/02/2026, applicable to financial years beginning on or after 01/01/2027).

Why Europe created an ESG standard for SMEs

The VSME/VS did not come about by chance. It responds to a well-identified knock-on effect of the CSRD: when large companies had to report on the sustainability of their entire value chain, they began questioning their suppliers, including micro-enterprises and SMEs. The result was a proliferation of disparate, time-consuming and often redundant ESG questionnaires.

To stem this trend, the Commission, through the SME Relief Package of 12 September 2023 (Communication COM(2023) 535 final), tasked EFRAG with creating a voluntary standard specific to SMEs. The idea: to offer a single, proportionate standard that serves as a common response to all these requests, and to avoid every SME reinventing its own reporting. This same mechanism also underpins the value chain cap, which limits what a client company can ask of a small partner.

Frequently asked questions about the VSME/VS standard

Is the VSME/VS mandatory?

No. On 8 November 2026, the VSME/VS is a voluntary standard: no penalties, no mandatory filing, no statutory deadline. It may nevertheless become necessary in practice when a customer, a bank or a call for tenders asks for ESG information.

Who does the VSME/VS apply to?

Mainly unlisted SMEs and micro-enterprises that fall outside the mandatory scope of the CSRD. Since the Omnibus I directive raised the thresholds, the only companies still subject to the CSRD are those with more than 1,000 employees and more than €450 million in net turnover; all others fall under a voluntary approach.

Does a VSME/VS report need an audit?

No, there is no mandatory audit or third-party verification of a VSME/VS report. A company may nevertheless choose to strengthen the credibility of its report through a voluntary assurance engagement, carried out for example by a chartered accountant or a statutory auditor.

VSME/VS standard: definition, modules and status of the future voluntary standard (VS)

What is the VSME/VS standard?

Who is the VSME/VS for?

Voluntary, not mandatory: what this means

The structure of the standard: Basic Module (B1 to B11) and Comprehensive Module (C1 to C9)

The Basic Module, the common core for all companies applying the VSME/VS

The Comprehensive Module, which adds to the Basic Module

No double materiality and no mandatory audit: the “if applicable” principle

VSME/VS and VS: two related but distinct instruments

VSME/VS: EFRAG standard endorsed by Recommendation (EU) 2025/1710 of 30/07/2025

VS: voluntary standard adopted on 03/07/2026, published in the OJEU on 21/09/2026, in force since 24/09/2026

Why Europe created an ESG standard for SMEs

Frequently asked questions about the VSME/VS standard

Is the VSME/VS mandatory?

Who does the VSME/VS apply to?

Does a VSME/VS report need an audit?

Further reading