VSME Reporting in Brief: What Does It Mean for SMEs?

What Is VSME?

VSME (Voluntary Sustainability Reporting Standard for SMEs) is a sustainability reporting standard for small and medium-sized enterprises, developed by the European Financial Reporting Advisory Group (EFRAG). It is a voluntary general standard and should not be confused with the ESRS standards under CSRD, which apply to larger companies.

VSME has been designed specifically for companies that:

• Are suppliers to large corporations in their value chain
• Are in a financing relationship with a lender or investor that requests sustainability data
• Want to report on sustainability in a structured manner, but are not yet subject to the full scope of CSRD requirements

The Two Modules of VSME

VSME consists of two modules:

Basic Package (BP) covers the essentials: general company information, climate impacts (Scope 1, 2, and at minimum Scope 3 hotspots), energy consumption, water use, waste, and key social indicators.

Comprehensive Package (LSME) goes deeper: more detailed Scope 3 calculation, climate risk reporting aligned with TCFD, and more thorough social reporting.

For most value chain requests, the Basic Package is sufficient.

What Does VSME Require in Practice?

VSME reporting requires that:

1. Emissions calculations have been completed: at minimum, Scope 1 and 2 in full, and Scope 3 hotspots identified
2. Energy data has been compiled: electricity, heat, fuels
3. Social indicators are available: headcount, workplace accidents, training hours

The good news is that if a GHG Protocol-compliant calculation has already been done, a large share of the data VSME requires is already in place.

Who Requests a VSME Report?

The most common situations:

• A large customer sends a sustainability data request to its suppliers
• A bank or financial institution requests sustainability data as part of loan collateral or a due diligence process
• A company is seeking financing and wants to present its information in a structured format

How Does NGS Help with VSME Reporting?

We typically handle VSME reporting as part of a carbon accounting project. Once a GHG Protocol-compliant calculation has been completed, the step to a VSME report is short: we collect the remaining data needed, structure the form, and deliver the report for the client’s use.

If a VSME report is needed quickly and the emissions calculation is already done, the project scope can be limited to the reporting phase only.

Summary

VSME is a practical tool for SMEs that want to respond to sustainability data requests in a structured way. It is not intended for public reporting or brand-building purposes, but rather to meet the information needs of value chain partners and financiers.

If you have received a sustainability data request and are not sure where to start, get in touch. Together we will review what is already in place and what is still missing.