The European Commission has adopted recommendations on voluntary sustainability reporting for small and medium-sized enterprises (SMEs), aiming to reduce their administrative burdens and facilitate their response to information requests from large companies and financial institutions under mandatory reporting requirements pursuant to the CSRD.
The Voluntary SME Standard (VSME), prepared by EFRAG, is intended to make it easier for companies to provide data, while also encouraging SMEs to report voluntarily, as this can improve their access to sustainable finance and help them better monitor their performance and competitiveness.
In February 2025, the European Commission proposed that mandatory reporting would be limited to companies with more than 1,000 employees, while a voluntary standard would be available for others, serving also as a safeguard against excessive demands from larger companies in supply chains. The recommendations are a temporary solution until the adoption of a delegated act that will define the final voluntary standard, the content of which may still change depending on negotiations on the Omnibus I package, the revision of the first European Sustainability Reporting Standards (ESRS), and agreements between legislators on the scope of reporting. The standards were developed by the European Financial Reporting Advisory Group (EFRAG), which serves as the European Commission’s advisory body on sustainability reporting.
The delegated act will be adopted through a process involving:
- consultations with Member States,
- EU supervisory authorities,
- other stakeholders,
- and the public via the “Have Your Say” platform.
The VSME standard was prepared following public consultation and testing with SMEs, which endorsed it as a simple tool to replace most data requests from banks and large companies. Supporting materials are already available for companies within the VSME ecosystem, where EFRAG provides educational videos, digital templates, and methodological guidance.
Conclusion
Voluntary sustainability reporting offers small and medium-sized enterprises many advantages – from reducing administrative burdens to gaining better access to sustainable financing. At Unija, we have prepared expert materials to help you understand ESG requirements and effectively integrate them into your business:
- ESG sustainability reporting – what to expect?
- ESG strategy – a guide to gaining competitive advantage
For a comprehensive overview and support in sustainable transformation, visit our main page:
If you need assistance in providing the information required by large companies and financial institutions for reporting under CSRD, you can contact us at info@unija.com.
