The Voluntary standard for non-listed micro-, small- and medium-sized undertakings (VSME)  is a voluntary ESG reporting framework developed by EFRAG for SMEs that are not in scope for the EU’s Corporate Sustainability Reporting Directive (CSRD).

Unlike CSRD, which mandates double materiality assessments and comprehensive disclosures under the European Sustainability Reporting Standards (ESRS), VSME is designed to be much simpler and more accessible for SMEs.

The VSME framework consists of two modules: a Basic module for foundational ESG disclosures and a Comprehensive module for businesses seeking deeper alignment with evolving ESG expectations. VSME aims to help SMEs improve transparency and ESG maturity at their own pace, while also supporting future readiness for potential regulatory changes.

The VSME (Voluntary Sustainability Reporting Standard for non-listed SMEs) is designed for micro-, small-, and medium-sized enterprises meeting specific thresholds:
• Micro-undertakings: Balance sheet ≤ €450k or net turnover ≤ €900k or ≤10 employees.
• Small-undertakings: Balance sheet ≤ €5M or net turnover ≤ €10M or ≤50 employees.
• Medium-undertakings: Balance sheet ≤ €25M or net turnover ≤ €50M or ≤250 employees.

It is especially useful for businesses in CSRD-exposed value chains, those seeking access to sustainable finance, or SMEs aiming to future-proof their operations in anticipation of expanding ESG regulations. VSME serves as a stepping stone toward more robust ESG strategies and helps SMEs remain competitive and aligned with global sustainability expectations.

Although voluntary, companies should adopt VSME because it is an EU-endorsed, standardized ESG framework designed to simplify and harmonize sustainability reporting.
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This makes VSME critical for SMEs to avoid redundant ESG questionnaires from investors, banks, and supply chains, replacing fragmented requests with a single, harmonized framework. Despite being voluntary, VSME aligns with EU sustainability goals and offers market-driven advantages such as:
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• Access to green finance via standardized ESG data.Supply chain readiness for CSRD-covered clients.
• Future-proofing against potential regulatory expansion (e.g., EU’s 2025 Omnibus proposal).
• The framework also has a strong market acceptance, having been developed with input from thousands of SMEs and large corporates, helping businesses enhance access to green financing, strengthen supply chain relationships, and prepare for future regulatory changes.

Overall, VSME offers a practical, cost-effective way for SMEs to build ESG credibility and remain competitive in an evolving sustainability landscape.

VSME provides SMEs with a practical and streamlined pathway to ESG reporting by reducing complexity and cost. The framework uses standardized templates and ESG indicators that are aligned with the ESRS principles but without the full burden of CSRD’s requirements, such as mandatory double materiality or external assurance.

The Basic module covers essential ESG topics (e.g., energy use, waste, workforce policies), while the Comprehensive module allows for more detailed disclosures, such as climate strategy and risk management. This modular approach enables SMEs to gradually scale their ESG disclosures, improve supply chain positioning, meet investor or lender expectations, and enhance access to green finance — all while preparing for potential future regulatory alignment under CSRD.