Voluntary Standard: lean solution for your sustainability report

Even if many companies are no longer subject to reporting obligations following the EU Omnibus I reforms, market requirements remain: sustainability data continues to be a key consideration for customers, banks, investors and funding bodies. This is precisely where the Voluntary Standard (VS) comes in. The standard developed by the EU offers companies with an average of no more than 1,000 employees that choose to report voluntarily a practical framework for compiling and effectively communicating their sustainability data.

What are the real benefits of the Voluntary Standard? In this blog article, we demonstrate which sustainability information is covered by the VS, which modules it consists of and why large companies are also increasingly turning to this standard.

The VS makes it easier to meet sustainability requirements

Medium-sized companies are increasingly confronted with ESG (Environmental, Social, Governance) requests from business partners, banks and investors. They often have to complete a wide range of questionnaires to provide sustainability information to their financial institutions and business partners subject to mandatory reporting requirements – a process that is often costly and inefficient.

The Voluntary Standard is designed to remedy this by:

Standardising sustainability data – providing a clear structure for efficient reporting
Enhancing future readiness – preparing companies at an early stage for increasingly demanding regulatory requirements
 Improving transparency – and thus strengthening trust among customers and business partners

What does the Voluntary Standard include?

The sustainability report is primarily intended to provide information to business partners and may be made publicly available on a voluntary basis. As a general rule, it is prepared annually and may be integrated into the management report, published as a separate document, or combined with the EMAS environmental statement. Cross-references to unchanged information or information published elsewhere can help avoid duplication of disclosures. 

Basic Module – the core requirements

• Corporate structure, sites and sustainability certifications
• Sustainability policies and planned actions
• Energy consumption and greenhouse gas emissions
• Pollution, biodiversity and water consumption
• Resource use, the circular economy and waste management
• Workforce composition, occupational health and safety, remuneration and training
• Collective bargaining coverage and the gender pay gap, where applicable
• Convictions and fines related to corruption or bribery

Comprehensive Module – for deeper insights

Companies seeking to meet more detailed information requests from external stakeholders can use the Comprehensive Module.

The disclosures are aligned with the statutory and regulatory requirements applicable to financial market participants and corporate clients. At the same time, they address the information needs of business partners seeking to assess a company’s sustainability risk profile, for example when considering it as a potential supplier or borrower. 

The Comprehensive Module builds on the Basic Module and includes nine additional reporting topics. It provides further disclosures on the company’s business model and sustainability strategy, Scope 3 emissions, climate targets, and climate-related risks. It also covers workforce-related matters, human rights, the gender diversity ratio in the governance body, as well as revenue generated from certain controversial business activities. 

The ‘if applicable’ principle

The VS distinguishes between mandatory data points, voluntary disclosures and information that is required only under specific circumstances. For the latter, the so-called ‘if applicable’ principle applies: the relevant disclosure is required only if the circumstances specified in the disclosure requirement apply to the undertaking. If an undertaking omits such a disclosure, it is assumed that it does not apply.

As a general rule, a selected module must be applied in full. However, the ‘if applicable’ principle ensures that undertakings are only required to disclose information that applies to their particular circumstances. This allows the reporting requirements to be tailored to the undertaking’s individual situation.

Two options for VS reporting

• Option A: Reporting in accordance with the Basic Module only
• Option B: Reporting in accordance with both the Basic Module and the Comprehensive Module

The Basic Module always forms the foundation of the reporting. Therefore, the Comprehensive Module cannot be applied on a standalone basis and may only be used in addition to the Basic Module. In its report, the undertaking must specify which option it has chosen. It must also explicitly state that the report has been prepared in accordance with the Voluntary Standard and the selected reporting option. 

Tips for reporting under the Voluntary Standard

Start collecting data early – document and structure existing sustainability measures
Use the Basic Module as a starting point – the Comprehensive Module can be added at a later stage 
Use synergies – build on existing systems and frameworks such as EMAS or ISO 14001
Involve stakeholders – coordinate with business partners and financial institutions at an early stage
Benefit from funding programmes – obtain financial support for your sustainability initiatives (see below)

Funding programmes at a glance

BAFA – funding for management consulting services for SMEs

Under the German ‘Förderung von Unternehmensberatungen für KMU’ programme consultancy services may also address sustainability-related matters, provided they are individually tailored and focus on strategic business management. Eligible services may include, for example, initial steps towards sustainability reporting, gap analyses, the development of ESG measures or preparation for sustainability ratings such as EcoVadis.

Consultancy costs of up to €3,500 per consultancy assignment are eligible for funding. As a general rule, the grant covers 50% of eligible costs, up to a maximum of €1,750. For companies located in the new federal states of Germany, excluding Berlin and the Leipzig region, as well as in the Lüneburg and Trier regions, the grant covers 80% of the eligible costs, up to a maximum of €2,800. The current funding guidelines remain in force until 31 December 2026. During this period, companies may receive funding for up to five consultancy assignments, with no more than two funded per year. Eligibility is assessed on a case-by-case basis.

BAFA Module 5 - Transformation plans

The EEW-Modul 5 supports companies in preparing a transformation plan. Depending on the size of the company, funding covers 40% of eligible costs for large companies, 50% for medium-sized companies and 60% for small companies. The maximum grant is generally €60,000. For companies or business sites that actively participate in a network under the Initiative for Energy Efficiency and Climate Action Networks (IEEKN), the funding rate increases by ten percentage points. The maximum grant also rises to €90,000.

A transformation plan sets out the long-term decarbonisation strategy of a company or one or more of its business sites. It provides a qualitative and quantitative description of the current position in relation to a carbon reduction target and identifies suitable measures for achieving that target.

‘Unternehmen machen Klimaschutz’ funding programme

The 'Unternehmen machen Klimaschutz' corporate climate action programme of the Baden-Württemberg Ministry for the Environment, Climate and Energy Sector supports companies with a registered office or operational site in Baden-Württemberg in the implementation of climate protection measures. Companies can receive financial support for consultancy services relating to the preparation of greenhouse gas inventories, the development of transformation strategies and the identification of emission-reduction measures.

The consultancy grant covers 75% of consultancy costs, up to a maximum of €900 net per consultant-day for up to five consultancy days. Investments that result in a significant reduction or avoidance of greenhouse gas emissions are also eligible for funding. The investment grant covers up to 50% of eligible expenditure, subject to a maximum of €80,000. Further information is available here: ‘Companies protect the climate’ - is yours on board?

Approaching sustainability reporting successfully

Whether identifying relevant KPIs, collecting ESG data or setting up internal structures, efficient reporting requires time and careful planning. Starting early lays the foundation for a smooth reporting process and helps avoid additional work.

With extensive expertise in funding, innovation and sustainability, and as an official DNK Guide (‘DNK Lotse’), we provide practical support tailored to your specific needs. Our sustainability consultants look forward to assist you. Feel free to get in touch.

(Header image: Freepik)