VSME/VS and CSRD often come up in the same conversation, to the point that people confuse them. Yet these two European frameworks differ in legal nature, target audience and scale. One is a mandatory reporting framework for large companies; the other, VSME/VS, is a voluntary standard designed for SMEs that remain outside that scope. This article untangles the key differences, as of 8 November 2026.
In a nutshell: what are we talking about?
The CSRD (Corporate Sustainability Reporting Directive) is a European directive that requires certain companies to publish a detailed sustainability report, in accordance with the ESRS, with verification by a third party.
VSME/VS (Voluntary Sustainability reporting standard for SMEs) is a voluntary standard developed by EFRAG, submitted to the European Commission on 17 December 2024 and endorsed by Commission Recommendation (EU) 2025/1710 of 30 July 2025. This recommendation is soft law: it imposes no obligation. VSME/VS is aimed at unlisted SMEs and micro-enterprises that wish to structure their non-financial communication without taking on the cumbersome requirements of the CSRD.
Difference no. 1: obligation versus voluntary use
This is the fundamental distinction. The CSRD imposes reporting on companies within its scope, with a statutory timetable and penalties for non-compliance. VSME/VS, by contrast, comes with no obligation, no penalty and no regulatory filing. A company applies it because it chooses to or, more often, because a customer, a bank or a call for tenders asks it for ESG data and it wants to respond in a standardised way.
This nuance deserves closer examination: “voluntary” in legal terms does not mean “optional” in practice. We explore this paradox in our article on the voluntary nature of VSME/VS.
Difference no. 2: the target – large companies versus SMEs
The CSRD targets large companies. Since the so-called “Omnibus I” directive – Directive (EU) 2026/470 of 24 February 2026 – its scope has been sharply narrowed. A company now falls within the scope of the CSRD only if it exceeds two cumulative thresholds: more than 1,000 employees AND more than €450 million in net turnover. This is indeed an “AND” test, not two out of three criteria. These new rules apply to financial years beginning on or after 1 January 2027, with first reports in 2028.
VSME/VS fills precisely the gap below this threshold: SMEs and micro-enterprises that are not – or no longer – subject to the CSRD, but which nonetheless need a common language to talk about sustainability.
Difference no. 3: higher thresholds are shifting companies towards voluntary reporting
This point is often overlooked. By raising the thresholds, Omnibus I removes from the CSRD’s scope a large number of companies that expected to be subject to it. According to Commission estimates, the effect would be around 80% fewer companies within the mandatory scope.
In practice, a mid-sized company that was preparing for the CSRD may find itself outside the obligation while continuing to receive ESG requests from its major corporate customers or its banks. For these organisations, voluntary reporting – VSME/VS, and now the voluntary standard (VS), in force since 24 September 2026 (Delegated Regulation (EU) 2026/1560) – becomes a natural response. To understand this shift in detail, see our coverage of Omnibus I and the regulatory timetable.
Difference no. 4: double materiality, present in the CSRD, absent from VSME/VS
The CSRD is built on the principle of double materiality: the company must analyse both the impact of its activities on the environment and society (impact materiality) and the effect of sustainability matters on its own financial position (financial materiality). This analysis is demanding and shapes the entire report.
VSME/VS, by contrast, does not require a double materiality assessment. It follows a much simpler “if applicable” approach: the company reports the information relevant to its activities, without building a full materiality matrix. This is one of the reasons why VSME/VS remains accessible to a small organisation without dedicated ESG expertise: we set out the steps to follow in our guide to applying VSME/VS in an SME.
Important: the ESRS changed on the same day. On 3 July 2026, the Commission adopted a second delegated act, C(2026) 5010, which simplifies the ESRS themselves. Published in the Official Journal of the EU on 21 September 2026 (Delegated Regulation (EU) 2026/1563), it will enter into force on 10 November 2026 and will apply to financial years beginning on or after 1 January 2027: it reduces the number of mandatory datapoints by 61%. The comparisons below therefore relate to an ESRS framework that has already been simplified – the gap in workload compared with the voluntary standard remains significant, but it is narrowing.
A nuance since the revision of 3 July 2026: the revised ESRS retain double materiality, but explicitly allow a top-down approach that avoids assessing each impact, risk and opportunity one by one. The exercise remains absent from the voluntary standard; the gap in workload is shrinking without disappearing.
Difference no. 5: comprehensiveness and structure
The CSRD relies on the ESRS, a body of standards covering a very wide range of environmental, social and governance topics, in considerable detail.
VSME/VS is far more focused. It is organised into two blocks:
- a Basic Module, made up of disclosures B1 to B11 (the common foundation for all companies applying the standard);
- a Comprehensive Module, made up of disclosures C1 to C9, which is added to the Basic Module for companies wishing to go further.
EFRAG publishes no official count of “datapoints” for VSME/VS: the key thing to remember is this two-module architecture, which is far less voluminous than the ESRS.
Not to be confused with the ESRS. For the revised ESRS, EFRAG published on 28 August 2026 an official list of datapoints, open for error reports until 23 October 2026. It concerns the framework for companies subject to the CSRD, not the voluntary standard — see our regulatory monitoring.
Difference no. 6: third-party verification
The CSRD requires mandatory assurance of the report by a verifier (statutory auditor or independent third-party body). The VSME/VS, on the other hand, requires no mandatory assurance. A company may nevertheless choose to strengthen the credibility of its report voluntarily, for example through a review engagement carried out by its chartered accountant – an optional step, but a useful one when dealing with a demanding partner.
Summary table
| Criterion | VSME/VS | CSRD |
|---|---|---|
| Nature | Voluntary standard (soft law) | Mandatory directive |
| Target | Unlisted SMEs and micro-enterprises outside the CSRD scope | Large companies (more than 1,000 employees AND more than €450 million in net turnover) |
| Double materiality | Not required | Required |
| Structure | Basic Module (B1-B11) + Comprehensive Module (C1-C9) | ESRS, highly detailed |
| Third-party verification | Optional | Mandatory |
| Penalties / filing | None | Yes |
Do you need both VSME/VS AND CSRD reporting?
No. The two frameworks do not stack: a company subject to the CSRD publishes an ESRS report and has no need for VSME/VS. A company outside the CSRD scope may, if it wishes, apply VSME/VS to respond to its stakeholders. The question to ask is therefore not “which of the two?” but “am I within the scope of the CSRD or not?”.
To position VSME/VS against the full range of sustainability frameworks – ESRS, GRI, EcoVadis, ISO 26000 – and not just the CSRD, continue with our full comparison of reporting frameworks. And for an in-depth understanding of what the standard really is, its structure and its status, start with our reference page on the VSME/VS standard.
Sources and verification — checked on 8 November 2026
Every regulatory statement on this page has been checked against the official text. The references below allow you to verify it for yourself.
- Commission Delegated Regulation (EU) 2026/1560 of 3 July 2026 (adopted under reference C(2026) 5011), “supplementing Directive 2013/34/EU of the European Parliament and of the Council by establishing sustainability reporting standards for voluntary use by undertakings protected by the value chain cap” — legal basis: Article 29ca(1) of Directive 2013/34/EU. Published in the Official Journal of the EU (L series) on 21 September 2026, in force since 24 September 2026 (Article 4); its Article 3 (value chain cap) applies to financial years beginning on or after 1 January 2027. Official text on EUR-Lex · version adopted on 3 July 2026 (PDF, European Commission). Relevant provisions: Articles 1 (definition of the cap), 2(1) (who may apply the standard), 3(2) (the cap covers only the datapoints in Annex II), 4 (entry into force), recital 5 (end of the legal effects of the Recommendation, message to funders). Transmitted to the European Parliament and the Council on 3 July 2026 (Council document 11697/26 of 9 July 2026).
- Commission Delegated Regulation (EU) 2026/1563 of 3 July 2026 (adopted under reference C(2026) 5010, revision of the ESRS): reduces the number of mandatory datapoints by 61%. Published in the Official Journal of the EU on 21 September 2026; enters into force on 10 November 2026 (Article 3) and applies to financial years beginning on or after 1 January 2027. Official text on EUR-Lex · adopted version (PDF, European Commission).
- Commission Recommendation (EU) 2025/1710 of 30 July 2025 (endorsement of EFRAG’s VSME), OJEU of 5 August 2025 — text on EUR-Lex. Recital 5 of Delegated Regulation (EU) 2026/1560 provides that it “should be considered as no longer producing legal effects” from the entry into force of that regulation, i.e. from 24 September 2026.
- Directive (EU) 2026/470 of 24 February 2026 (Omnibus I), published in the OJEU on 26 February 2026, entered into force on 18 March 2026 — text on EUR-Lex. National transposition due by 19 March 2027 at the latest.
- EFRAG — VSME/VS digital template and XBRL taxonomy, version 2.0.0 of 4 November 2026 (prepared in accordance with the voluntary standard (VS), Delegated Regulation (EU) 2026/1560 published in the Official Journal of the EU on 21 September 2026; it replaces version 1.3.0 of 11 June 2026, which EFRAG says should no longer be used) — EFRAG page.
- EFRAG — “2026 Draft List of Datapoints for Revised ESRS”, published on 28 August 2026: fatal flaw review open until 23 October 2026, final version expected by the end of 2026. It covers the revised ESRS adopted by the Commission in July 2026, not VSME/VS — EFRAG announcement (accessed on 1 September 2026).
A question about the timeline? We track the status of each text, with dates, in our regulatory updates.
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