The alternative for CSRD
Simplified sustainability reporting based on the VSME
Sustainable progress amidst changing regulations
The Voluntary Sustainability Reporting Standard (VSME), developed by EFRAG, provides a pragmatic and proportionate framework for simplified sustainability reporting. The VSME is closely aligned with the applicable European sustainability standards, making it ideal for organisations no longer bound by mandatory sustainability reporting requirements. With the finalisation of the EU Omnibus package, around 42,000 companies, possibly including yours, fall outside the scope of the Corporate Sustainability Reporting Directive (CSRD) and are no longer required to report in line with this regulation. But this doesn't mean sustainability takes a back seat. On the contrary, stakeholder expectations for transparency in sustainability performance continue to rise.
Simplified sustainability reporting based on the VSME enables organisations to communicate their sustainability ambitions and performance in a clear and accessible way, without the complexity and costs associated with full CSRD compliance. This helps you meet stakeholder expectations, maintain insight into sustainability risks and opportunities, and support long-term sustainable growth. It is therefore no surprise that the European Commission has designated the VSME as ‘the reporting standard’ for companies that no longer have a statutory ESG reporting obligation.
Pragmatic and future‑proof reporting with the VSME:
- Prepare for ESG‑related data requests from larger organisations across your value chain. Reporting in line with the VSME lets you respond to the information needs of banks, investors and other key stakeholders.
- Avoid falling behind in a Europe that places sustainable competitiveness at its core. By using the formally recommended VSME standard, you align with market developments and move in step with your industry.
- Strengthen access to finance through simplified sustainability reporting. Being transparent about your most important sustainability topics helps your organisation stand out and shows alignment with the ESG objectives of potential investors.
- Build a future‑proof organisation and improve its resilience by identifying new opportunities promptly and managing sustainability‑related risks effectively.
”The VSME makes sustainability reporting achievable for every organisation, moving the focus from an endless sea of data points to what truly matters.”
The VSME: Why, What, and Its Relation to CSRD
In today’s Europe, the focus is on building a competitive and sustainable economy, where reducing regulatory burden goes hand in hand with transparency and sustainable business practices. In this context, the European Commission has announced a renewed voluntary standard based on the VSME. Applying this standard not only strengthens the future-readiness of your organisation, but also serves as a protective shield for companies that are not subject to the CSRD.
This standard limits the information that large companies falling within the scope of the CSRD are required to obtain from their value chain partners. Their information requests are maximized to the data points included in the voluntary standard. In doing so, the voluntary standard provides a uniform and proportionate framework that enables you to report sustainability information in a practical and appropriate way for CSRD reporting companies and other stakeholders.
What does this standard look like and how does it relate to the CSRD?
What is the VSME?
The VSME standard consists of two modules: the Basic Module and the Comprehensive Module. The Basic Module includes eleven reporting requirements, covering general sustainability policies and initiatives, along with metrics across Environmental, Social, and Governance topics. The Comprehensive Module builds on the Basic Module, adding nine more reporting requirements that offer deeper insights and data points, enhancing the disclosures found in the Basic Module. This module is aligned with the information needs of stakeholders such as banks, investors and business customers. Both modules can be tailored with entity- or sector-specific sustainability topics, ensuring the reporting stays relevant and meaningful for your organisation and its stakeholders. For instance, by addressing sustainability issues unique to a particular sector.
The Basic Module is the targeted approach for micro-enterprises and is a minimum requirement for other enterprises.
The Comprehensive Module defines additional data points that are likely to be requested by banks, investors, and business customers, complementing the information provided in the Basic Module.
How VSME relates to the CSRD
Simplified sustainability reporting based on the VSME is positioned as 'the alternative' for organizations that fall outside the mandatory application of the CSRD. While the standards share substantive similarities, there are also some key differences that set them apart.
Navigating towards sustainable value creation
With the EU Omnibus package now adopted, a long period of uncertainty has come to an end for organisations outside the scope of the CSRD. The pause button can finally be released, allowing you to focus on sustainability information that truly matters: relevant, comparable, aligned with stakeholder expectations and proportionate for organisations without a statutory reporting obligation. Wondering what steps to take next?
- Already started sustainability reporting? Identify the information you already have, assess it against the VSME requirements, and map what is still missing. This approach lets you gather the remaining data efficiently. Want to streamline this process? Use our maturity scan.
- Not started yet? Start with proportionate ESG reporting based on the VSME standard, now that it is clear you are no longer subject to the CSRD. This allows you to meet the growing information needs of stakeholders and build trust and long‑term resilience, without adding unnecessary complexity. Our VSME Report Builder helps you prepare your report swiftly and effectively.
With these no‑regret moves, your organisation remains well-positioned, agile and attractive to stakeholders. We're here to support you in taking the right steps and creating sustainable value, so you can confidently face the future.
"Simplified sustainability reporting is not an administrative burden, but a strategic tool for differentiation and future readiness. It encourages organisations to look ahead and ask the right questions about their business model.”
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