The European Commission has presented the Voluntary Sustainability Reporting Standard for Small and Medium-sized undertakings (VSME standard). The standard aims to ease the data sharing burden on SMEs, improve access to sustainable finance and improve the management of sustainability issues that SMEs face.

Under the standard, SMEs can report on various ESG metrics at two different levels using either a Basic module or a Comprehensive module. The Basic module is targeted for micro-enterprises and constitutes the minimum requirements for reporting under the VSME standard and is a prerequisite for reporting under the Comprehensive module. While the Comprehensive module expands on the Basic module with more detailed reporting. The comprehensive module reports on metrics often required by investors, banks and large corporates. This is a major step forward in easing the reporting burden and complexity for SMEs who often lack the capacity and skills to adopt sustainability reporting.

The Basic module covers:

Environmental metrics: Scope 1 & 2 emissions, resource use and biodiversity
Social metrics: Workforce characteristics, health, safety, remuneration
Governance metrics: Disclosing corruption convictions

The Comprehensive module covers (additional to the Basic module):

Environmental metrics: Scope 3 emissions, setting reduction targets, disclosing any potential climate risks from operations
Social metrics: Additional characteristics, human rights policies and processes, disclosing severe human rights incidents
Governance metrics: Gender diversity in governance, revenue disclosure from certain activities

Supporting Documents

Document Name	Download
Annex 1 – VSME Sustainability Reporting Standard	Download here
Annex 2 – Practical Guidance for VSME Reporting	Download here
EU Commission Recommendation – VSME Reporting	Download here