What is VSME reporting?
More and more SMEs are receiving questions about sustainability — from their bank, large clients or when tendering for contracts. VSME reporting is the standard developed for exactly this purpose. In this article we explain what it is, who needs it and how to get started.
What does VSME stand for?
VSME stands for Voluntary Sustainability Reporting Standard for SMEs — a European standard for sustainability reporting by small and medium-sized enterprises. The standard was developed by EFRAG (European Financial Reporting Advisory Group) as a lighter alternative to the full CSRD legislation that applies to large companies.
VSME consists of two modules:
- Basic module (B1–B11) — essential sustainability information on environment, CO₂, people and governance
- Extended module (C1–C9) — additional information such as Scope 3, climate risks and reduction targets
Why are SMEs receiving ESG questions?
Large companies subject to CSRD legislation are required to report on their full value chain — including their suppliers and chain partners. This means they request ESG information from their SME suppliers.
But it goes beyond the supply chain:
- Banks are increasingly applying ESG criteria to financing applications
- Governments are weighting sustainability in tender procedures
- Large clients are selecting suppliers partly on the basis of ESG performance
Companies that start with VSME reporting now will be prepared — and will stand out from the competition.
What does a VSME file contain?
A complete VSME file covers three main themes:
- Environment — energy consumption, CO₂ emissions (Scope 1, 2 and 3), water use, waste and biodiversity
- Social — workforce, working conditions, equal pay and human rights in the supply chain
- Governance — company structure, anti-corruption policy and business code of conduct
Is VSME reporting mandatory?
No — the VSME standard is not currently a legal requirement for SMEs. However, in practice more and more companies are being asked about it informally by clients, banks and contracting parties. Starting now means you will be well prepared without it becoming a heavy undertaking.
How do you build a VSME file?
With VSME Ready you work through all official VSME sections step by step. You enter the relevant information, attach evidence documents and the tool automatically calculates your CO₂ emissions for Scope 1, Scope 2 and Scope 3. At the end you export your file to a professional PDF and Excel report — ready to share with clients, banks or contracting parties.
The tool is available from €199 per year and active within 5 minutes — no installation or consultant required.
Ready to build your VSME file?
Try the demo for free — no account required. Fill in the questions and see how it works.