VSME standard: lean solution for your sustainability report

Even if many companies are relieved of their reporting obligations by the EU Omnibus Initiative, the requirements of the market remain: Sustainability data is still a key criterion for customers, banks, investors and funding bodies.
This is precisely where the Voluntary Sustainability Standard for SME (VSME) comes in: The standard developed by the EU offers voluntarily reporting companies a pragmatic structure for preparing and effectively communicating their sustainability data.

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

The VSME 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 partners subject to reporting requirements – a process that is often costly and inefficient.

The VSME standard is designed to remedy this by:

Standardising sustainability data – providing a clear structure for efficient reporting
Offering future-proofing – preparing companies for increasing regulatory requirements at an early stage
 Improving transparency – and thus strengthening the trust of customers and partners

What does the VSME standard include?

The final VSME draft has now been submitted by EFRAG to the European Commission. (You can download it here: VSME Standard.pdf.)

It comprises two modules:

Basic Module – the core requirements

• General information on the chosen reporting option, omitted information, subsidiaries and sustainability certifications
• Practices, strategies and future sustainability-related initiatives
• Environmental metrics such as energy consumption, greenhouse gas emissions, water use and waste management
• Social aspects including labour practices, compensation, health and employee training
• Governance topics, in particular anti-corruption, bribery and compliance
  
  

Comprehensive Module – for deeper insights

• Detailed climate reporting including emission reduction targets and climate risks if applicable
• Advanced social key figures, such as human rights and diversity in the workforce
• Further governance topics such as revenue from controversial sectors or gender diversity in management

Both modules follow the ‘if-applicable’ principle: companies only have to provide the information that applies to them, which limits the reporting effort.

This results in two options for VSME reporting:

1. Reporting exclusively according to the ‘Basic Module’
2. Reporting both the ‘Basic Module’ and the ‘Comprehensive Module’
   
   

Advantages of the VSME standard 

• ‘If applicable’ principle: Companies only report on topics that are actually relevant to them, which limits the reporting effort.
• Focus on quantitative data: The VSME emphasises measurable, comparable information – for greater transparency and meaningfulness.
• Practical assistance: The standard offers separate guidance chapters for each module with specific calculation methods and clear guidelines for implementation.

Tips for implementing VSME reporting

 Record data at an early stage – document and structure existing sustainability measures
Use the Basic Module as an introduction – you can upgrade to the Comprehensive Module at a later date
Use synergies – existing reporting formats such as EMAS or ISO 14001 can be integrated
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 - Promotion of business consultancies for SMEs: 

As part of the BAFA funding programme for business consultancies, sustainability issues can be addressed in a targeted manner - for example by providing advice on:

✔ First steps in reporting (frameworks, GAP analysis, etc.),
✔ Recommendations for action on ESG measures,
✔ Preparation for sustainability ratings (e.g. EcoVadis).

At federal level, the Federal Office of Economics and Export Control (BAFA) is responsible for implementing the Federal Ministry for Economic Affairs and Climate Action (BMWK) funding programme for business consulting for SMEs. Funding is provided for conceptual and individual consultancy on all economic and organisational issues relating to company management. The maximum amount of eligible expenditure is 3,500 euros. The funding rate and maximum subsidy for companies in the old federal states is a maximum of 50% or 1,750 euros. For the new federal states, these are a maximum of 80% or 2,800 euros. 

BAFA Module 5 - Transformation plans:

The BMWK also supports the creation of a transformation plan with a grant of up to 90,000 euros (funding rate up to 70%) for companies with a permanent establishment or branch in Germany. This is subsidised by BAFA in particular with Module 5 - Transformation Plans of the Federal Funding Scheme for Energy and Resource Efficiency in Economy (EEW). A transformation plan is the presentation of the longer-term decarbonisation strategy of a company or a company location. It contains a qualitative and quantitative description of the initial situation in relation to a CO2 reduction target as well as possible measures to achieve the CO2 target. You can read more about this here: How to get your CO2 balance calculation funded.

Companies protect the climate:

The 'Unternehmen machen Klimaschutz' funding programme of the Baden-Württemberg Ministry for the Environment, Climate and Energy Sector (BW) supports companies based or located in BW in the implementation of climate protection measures. Companies receive financial support for consultancy services to prepare greenhouse gas balances, develop transformation strategies and identify reduction activities. The consultancy funding covers 75% of the consultancy costs (max. 900 euros net per person day for up to 5 days). In addition, investments that result in a significant reduction or avoidance of greenhouse gases are subsidised. The investment subsidy amounts to up to 50% of the expenditure, up to a maximum of 80,000 euros.

How to master your sustainability report

Good to know: To facilitate application and broad market acceptance of the new standard, the VSME is to be accompanied by various online tools, guidelines and information events, which are expected in the course of 2025 (source: EFRAG). The free web platform of the German Sustainability Code (Deutscher Nachhaltigkeitskodex, DNK) is also currently being adapted to facilitate reporting in accordance with the VSME standard.

Our tip: Whether identifying relevant KPIs, collecting ESG data or setting up internal structures – efficient reporting requires planning and time. Those who start early lay the foundation for a smooth reporting process and avoid unnecessary additional work.

As an experienced consultancy for both sustainability and funding and official DNK training partner, we provide you with practical and needs-orientated support. Feel free to contact our experts in sustainability consulting at any time.

 Text: Carolin Ridder

(Header image: Freepik)