The European Commission has adopted a recommendation proposing that the VSME voluntary reporting standard be implemented by small and medium-sized enterprises not covered by the Corporate Sustainability Reporting Directive (CSRD).<\/p>\n
The Recommendation aims to provide SMEs with a standardised framework to facilitate the provision of information on environmental, social and governance (ESG) issues, in particular when this information is requested by financial institutions or large contracting partners.<\/p>\n
The voluntary standard is structured in two modules:<\/p>\n
The basic module - intended for all SMEs, includes a set of minimum information on environmental impact, labour conditions and governance issues.<\/p>\n
Comprehensive module - optional, contains additional requirements that can be applied depending on stakeholder requests or the company's level of preparedness.<\/p>\n
SMEs can opt to use only the basic module or both modules. Micro enterprises may only partially implement the basic module. The application of this standard is voluntary and not legally binding.<\/p>\n
The standard is designed to meet the following needs:<\/p>\n
The European Commission recommends financial institutions and large companies to use this standard when requesting information from SMEs.<\/p>\n
The current Recommendation is an intermediate step towards a future voluntary standard, to be formalised in a European Commission delegated act. This process is part of the simplification legislative package called \"Omnibus I\".<\/p>\n
In its final form, the standard could be subject to changes, depending on the progress of negotiations between the European institutions.<\/p>\n
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What is the link between the VSME recommendation and the future voluntary standard proposed in the Omnibus I simplification package?<\/p>\n
The Commission has proposed reducing the number of companies subject to mandatory reporting requirements to those with more than 1,000 employees. For other companies, a voluntary standard, based on the present VSME, is to be adopted.<\/p>\n
Can stakeholders expect changes between the Recommendation on the VSME standard and the proposed future delegated act?<\/p>\n
Yes. The content of the delegated act may be different from the current Recommendation, depending on the agreement between the co-legislators and the revision of existing standards.<\/p>\n
What is the process for adopting the delegated act for the future voluntary standard?<\/p>\n
The Commission must consult Member States, relevant European bodies and the public during a feedback period before adopting the delegated act.<\/p>\n
How was the VSME standard developed?<\/p>\n
The standard was developed by EFRAG, following public consultation and field testing with SMEs. It has been endorsed by businesses and users as a practical alternative to ad-hoc supply chain requirements.<\/p>\n