The VSME provides SMEs with a voluntary and accessible way to report on sustainability. Discover how the new version, launching on December 20, helps businesses with transparent and simplified reporting.
Wybren Kortstra
The VSME (Voluntary Reporting Standard for Small and Medium-sized Enterprises) is a new voluntary standard designed to help SMEs with sustainability reporting. In early 2024, the draft version, VSME ED (Exposure Draft), was introduced, and stakeholders were invited to provide feedback. You can read this initial version here. After processing the input received, a revised version will be launched on December 20, 2024. This update includes significant changes, such as simplifying the number of optional modules and removing the dual materiality analysis. These adjustments make reporting easier and help SMEs focus on the sustainability aspects most relevant to them.
In this blog, we explain the upcoming changes in the revised VSME version, their impact on SMEs, and how these updates can simplify reporting for your business.
The original draft version of the VSME featured three modules. This has now been streamlined to two modules: the basic module and the extended module. There is also discussion of a potential additional module focused on financial aspects, but this is still under development.
The basic module is mandatory for all businesses opting to create a VSME report. It is designed for micro-enterprises and non-listed SMEs, ensuring it is easy to read, understand, and apply. A key advantage is that it does not require a complex materiality concept, unlike the CSRD standard for larger companies. The basic module is divided into 11 reporting topics, each covering an aspect of the ESG (Environmental, Social, Governance) pillars. Each topic is mandatory for reporting if applicable to the company.
The 11 reporting topics in the basic module are:
Describe the foundations of your reporting, including module selection and report availability.
Cover policies and initiatives for sustainable development, including reducing negative impacts and enhancing positive effects on the environment and society.
Provide a detailed report on energy consumption and CO₂ emissions, broken down by renewable and non-renewable sources.
Report emissions of harmful substances if legally required or voluntarily recorded in an environmental management system.
Indicate where you operate and whether it’s in or near sensitive biodiversity zones, along with land use details.
Total water use by the organization, including specific data for areas with high water stress.
Details on raw material use, waste management, and application of circular principles, including recycled and reused materials in products, transport, and services.
Employment data, including contract type, gender, and turnover rates.
Data on work-related accidents and illnesses to monitor employee safety and well-being.
Information on salary structures, gender pay gaps, collective agreements, and annual training hours per employee.
Report any convictions or fines for violations of anti-corruption and anti-bribery laws.
The extended module is optional and enables SMEs to report more detailed data for partners or investors with specific requirements. This module requires additional knowledge and time investment and contains seven reporting topics. Businesses must first complete the basic module to apply the extended module.
The topics in the extended module are:
Specify if you generate revenue from sectors such as arms, fossil fuels, tobacco production, or chemicals.
Only relevant if your company has a governing body.
Report your greenhouse gas emissions according to the GHG protocol, along with your targets and plans for reduction.
Estimate expected financial impacts of physical risks like flooding, heatwaves, or biodiversity loss.
Gender balance at management levels and the number of non-employee workers.
Specify whether you have a code of conduct addressing human rights and how you handle employee complaints.
Report any violations, including subsequent actions taken.
In addition to the basic and extended modules, a separate module is being considered for non-listed SMEs working with financial institutions. This module would help businesses report sustainability data in line with EU taxonomy, serving as a basis for discussions with banks and financial partners.
The VSME makes sustainability reporting feasible and accessible for SMEs without unnecessary complexity. The basic module offers a solid foundation for transparency in impact reporting, while the extended module enables additional detail for companies meeting specific partner or investor requirements. The new version of the standard will be submitted to the European Commission on December 20 and subsequently made available to all. Further adjustments may be made based on feedback received. Want to learn how the VSME can help your business? Contact us for a free consultation or request a demo today.
Request a free demo and discover what the Green Otter can do for your organization.
Request Demo