What is the VSME reporting standard?
The VSME is a voluntary sustainability reporting standard recommended by the European Commission.
All undertakings that fall outside the scope of the CSRD may be faced with data requests from reporting undertakings within their value chain. The VSME sets a limit on the information that undertakings subject to the CSRD may request from undertakings in their value chain that are not required to report. This is referred to as the ‘value chain cap’.
In addition, undertakings that wish to prepare a sustainability report on a voluntary basis can make use of the VSME standard. The VSME does not require a double materiality analysis and does not require an assurance statement from an external auditor.
The final version of the VSME was submitted by EFRAG to the European Commission in December 2024. On 30 July 2025, the European Commission published a formal recommendation (Recommendation EU 2025/1710) in which it recommends the use of the VSME for micro, small and medium-sized undertakings (SMEs). As part of the Omnibus proposals, the European Commission has indicated that the VSME may be further amended. At present, the recommendation for all undertakings outside the scope of the CSRD is to use the VSME.
The purpose of the VSME is to enable undertakings to report and provide information on:
- how the undertaking has had, or is expected to have, a positive or negative impact on people or the environment in the short, medium or long term; and
- how environmental and social issues have affected, or are expected to affect, its financial position, performance and cash flows in the short, medium or long term.
The VSME consists of two levels:
- the basic module;
- the comprehensive module.
When an undertaking reports based on the VSME, it must always report at least on the basic module. An undertaking may choose to supplement this with the more extensive comprehensive module. The comprehensive module builds on the basic module. The basic module is a prerequisite for reporting on the comprehensive module.
Below is an overview of topics and requirements for both the basic and comprehensive modules.
(B) = Basic
(C) = Comprehensive
| E - Environment |
S- Social |
G- Governance |
| (B) Energy and greenhouse gas emissions |
(B) Workforce general characteristics |
(B) Convictions and fines for corruption and bribery |
| (B) Pollution of air, water and soil |
(B) Health and Safety - |
(C) Revenues from certain sectors and exclusion from EU reference benchmarks |
| (B) Biodiversity – Biodiversiteit |
(B) Remuneration, collective bargaining and training |
(C) Gender diversity in the governance body |
| (B) Water – Water |
(C) Human rights policies and processes - and complaints |
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| (B) Recourse use, circular economy and waste management |
(C) Severe negative human rights incidents |
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| (C)GHG reduction and climate transition |
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| (C) Climate risk |
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| E - Milieu |
| (B) Energy and greenhouse gas emissions – Energie en uitstoot van broeikasgassen |
| (B) Pollution of air, water and soil – Vervuiling van lucht, water en bodem |
| (B) Biodiversity – Biodiversiteit |
| (B) Water – Water |
| (B) Recourse use, circular economy and waste management – Grondstoffengebruik, circulaire economie en afvalbeheer |
| (C) GHG reduction and climate transition – Reductie van broeikasgassen en klimaattransitie |
| (C) Climate risk – Fysieke risico’s door klimaatverandering |
| S - Sociaal |
| (B) Workforce general characteristics – Algemene kenmerken van het personeelsbestand |
| (B) Health and Safety - gezondheid en veiligheid |
| (B) Remuneration, collective bargaining and training - beloning, collectieve onderhandelingen en opleiding |
| (C) Human rights policies and processes - and complaints – Impact op mensenrechten en klachten |
| (C) Severe negative human rights incidents – Ernstige negatieve mensen rechten schending |
| G - Governance |
| (B) Convictions and fines for corruption and bribery - Veroordelingen en boetes wegens corruptie en omkoping |
| (C) Revenues from certain sectors and exclusion from EU reference benchmarks - Inkomsten uit bepaalde sectoren en uitsluiting van EU-referentiebenchmarks |
| (C) Gender diversity in the governance body - Genderdiversiteit in het bestuursorgaan |
