Does VSME/VS apply to me? A decision tree for SMEs

You have heard of the VSME/VS standard, the European sustainability reporting framework designed for small and medium-sized enterprises, and one simple question keeps coming up: does it apply to me? The short answer fits in one sentence: no SME or micro-enterprise is legally required to apply VSME/VS. Many, however, have every reason to adopt it, because a request from a client, a bank or a tender often ends up making it unavoidable in practice. This decision tree helps you place your company in a few minutes.

The answer in one minute

VSME/VS is a voluntary standard. It was developed by EFRAG and endorsed by Commission Recommendation (EU) 2025/1710 of 30 July 2025, a non-binding soft law instrument. In other words: no legal obligation, no penalty, no mandatory filing anywhere. Nobody can fine you for not having produced a VSME/VS report.

So the real question is not “am I required to?” but “do I have a concrete reason to get started?”. Three criteria are enough to answer it: your size, your position with regard to the CSRD, and the requests you receive. Let us go through them.

Question 1: are you within the mandatory scope of the CSRD?

The CSRD is the European directive that makes sustainability reporting mandatory for large companies, under the ESRS. Since the Omnibus I directive, Directive (EU) 2026/470 of 24 February 2026, its scope has been sharply narrowed. It now covers companies that exceed two cumulative thresholds:

• more than 1,000 employees;
• and more than €450 million in net turnover.

Both must be exceeded at the same time. A company with 1,200 employees but €200 million in turnover is not in scope; nor is a highly capital-intensive company with €600 million in turnover but 300 employees.

• You exceed both thresholds? You are subject to mandatory CSRD reporting: your framework is the ESRS, not VSME/VS (see our comparison of VSME/VS with the CSRD and the ESRS). This site is not primarily aimed at you, although VSME/VS can help you frame your requests to your suppliers.
• You are below them? This is the case for the vast majority of SMEs and micro-enterprises. You have no reporting obligation… and that is precisely where VSME/VS becomes worthwhile. Move on to question 2.

Note: this narrowing, which applies to financial years beginning on or after 1 January 2027, takes a very large number of companies out of the scope of the CSRD. Many of them are therefore turning to standardised voluntary reporting, VSME/VS, to keep meeting the expectations of their stakeholders.

Question 2: do you receive requests for ESG data?

This is the most common trigger. An SME outside the scope of the CSRD has nothing to publish of its own accord, but it is increasingly approached by third parties who are themselves accountable. Does any of these situations sound familiar?

• A client, often a large group, sends you an ESG questionnaire or includes a sustainability clause in a contract. This large contracting customer is subject to the CSRD and must document its value chain: it passes the request on to you.
• Your bank or an investor asks you for non-financial information to assess a financing application.
• A tender, public or private, includes a scored CSR section.

If you tick at least one of these boxes, VSME/VS is made for you: it gives you a standard format to answer once and for all, instead of filling in ten different questionnaires. There is more good news: a European mechanism called the value chain cap, introduced by the Omnibus I directive, provides that what a contracting customer can demand from a partner with 1,000 employees or fewer is to be limited to the content of the voluntary standard. To understand how to use it to say “yes, up to this point, but no further”, see our guide VSME/VS and the value chain: the value chain cap and client requests.

Question 3: do you want to get ahead?

Even without having received a request, some companies choose VSME/VS proactively: to structure an emerging CSR approach, lend credibility to their sales pitch, anticipate future requests or stand out in their market. That is perfectly legitimate, provided a transparency tool is not turned into a communication exercise. VSME/VS is only worthwhile if the data published are real and verifiable.

Two dates that should not be confused. The standard becomes usable as soon as it enters into force, that is, on the third day following its publication in the Official Journal of the European Union (Article 4). The value chain cap, by contrast, only applies to financial years beginning on or after 1 January 2027 (Article 3). In other words, nothing prevents an SME from applying the standard before 2027.

Your decision tree in summary

1. Do you exceed 1,000 employees AND €450 million in net turnover? → CSRD mandatory (ESRS). VSME/VS is not your main concern.
2. If not, have you received a request (client, bank, tender)? → Yes: VSME/VS is the standardised response to prepare. → No: go to point 3.
3. Do you want to anticipate or structure your approach? → Yes: VSME/VS is an excellent voluntary framework. → No: the subject can wait, but keep it in mind, as requests are multiplying.

Three profiles, three starting points

• Head of an SME or micro-enterprise outside the CSRD: you are the core audience. Start by understanding what the standard really is, then the method.
• Company taken out of the CSRD’s scope following Omnibus I: you lose an obligation but keep demanding stakeholders. VSME/VS ensures continuity.
• Supplier to a large group: your priority is to answer questionnaires without being pushed to provide more than the defined scope.

Do you have 10 employees or fewer? The delegated act makes several environmental disclosures in the Basic Module optional (energy and greenhouse gas emissions in B3, water in B6, circular economy and waste in B7). See our page on the VSME/VS standard for details.

What next?

If it applies to you, or if you are simply curious, the logical next step is to understand in detail what the standard covers and how it is organised. Our reference page The VSME/VS standard: definition, modules and status of the voluntary standard explains the Basic Module (disclosures B1 to B11) and the Comprehensive Module (disclosures C1 to C9), without jargon. To clear up the most common ambiguity, also read Is VSME/VS mandatory? What “voluntary” really means. And when you are ready to take action, our step-by-step method awaits you in Applying the VSME/VS standard in SMEs and micro-enterprises.

Legal position as of 8 November 2026. VSME/VS is a voluntary standard endorsed by a European recommendation; the voluntary standard (known as “VS”) that succeeds it, adopted by the Commission on 3 July 2026, has been in force since 24 September 2026 (Delegated Regulation (EU) 2026/1560, published in the Official Journal of the EU on 21 September 2026). Our regulatory watch follows these developments day by day.

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 them 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 data points in Annex II), 4 (entry into force), recital 5 (end of the legal effects of the Recommendation, message to lenders and investors). 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 data points 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).
• 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.

A question about the timeline? We track the status of each text, with dates, in our regulatory watch.