At the request of the European Commission (EC), expressly confirmed on December 12, 2024, EFRAG is pleased to announce today the delivery of its technical advice on the VSME, the voluntary reporting standard for non-listed micro-, small-, and medium sized undertakings.

From 22 January 2024 to 21 May 2024, EFRAG conducted a public consultation on the Exposure Draft of the VSME, receiving input from a wide number of stakeholders, including SMEs, SME associations, banks, banking associations, large undertakings, accountants, national standard setters and other stakeholders. The EFRAG SR TEG and the EFRAG SRB have addressed the feedback emerged from the public consultation and implemented additional simplifications. The VSME was approved by EFRAG SRB on 13 November 2024 and by EFRAG SR TEG on 22 October 2024.

VSME Standard

The VSME is designed for undertakings that are not in the mandatory scope of the Corporate Sustainability Reporting Directive (‘CSRD’). EFRAG’s work on the VSME is based on the European Commission’s SME Relief Package of September 2023 which refers to this specific standard as a measure to support SMEs in accessing sustainable finance (“EFRAG will develop a voluntary standard for non-listed SMEs. SMEs can use this to standardise the sustainability information they wish to report, creating better opportunities to obtain green financing and thus facilitating the transition to a sustainable economy”).

Based on market acceptance, the VSME has been designed to provide a standardised set of information to replace the current multiple and uncoordinated questionnaires and ESG data requests.

The VSME is structured under a Basic Module and a Comprehensive Module. These two modules are expected to fulfil a substantial part of requests from business partners (i.e., banks, investors and large corporates) that SMEs currently receive. The VSME includes disclosures for undertakings across sectors; a few additional data requests cannot be excluded to reflect the specificities of some sectors.

Next steps

Stakeholders stressed the necessity to complement the VSME with a series of digital online tools, additional guidance and complementary materials that would serve to facilitate the uptake of the standard by SMEs and broad market acceptance. EFRAG in 2025 will activate a series of initiatives, including the issuance of support guides and educational material, outreaches, awareness raising events and the monitoring of emerging tools and platforms.

Patrick de Cambourg, the EFRAG SRB Chair, commented: “The issuance of the VSME confirms EFRAG’s commitment to contribute to a more sustainable economy. VSME is designed to support the availability of simple but relevant sustainability-related data.. It aims at reducing the burden for SMEs currently confronted with multiple uncoordinated data requests and, when supported by the appropriate online platforms and tools, will offer new business and financing opportunities as well as additional management insight to the reporting companies.”

Chiara Del Prete, the EFRAG SR TEG Chair, commented: “The development of VSME has been a very enriching experience. We received strong support from all the stakeholder categories along all the steps of our due process. I am grateful to all those that contributed and I am looking forward to continuing to support SMEs with practical guides, promoting synergies between the various initiatives that are developed and contribute to the emergence of a robust SME ecosystem.”

Links:

• EFRAG Cover Letter on VSME
• VSME Standard
• VSME Basis for Conclusions
• EFRAG’s Cover Letter and Cost Benefit Analysis on the VSME
• Feedback Statement on the public consultation