EFRAG VSME Standard: A Practical Guide for SMEs to Boost Sustainability and Competitiveness

The EFRAG VSME Standard offers small and medium-sized enterprises (SMEs) in the EU a clear opportunity to leverage sustainability strategically and strengthen their competitiveness. As sustainability expectations rise across Europe, this standard provides a practical, future-oriented framework that helps SMEs not only comply with evolving regulations but also unlock new business potential.

Key Points at a Glance:

• What is the VSME Standard?
  A voluntary EU framework developed by EFRAG to support SMEs in the standardized collection and reporting of sustainability data. The standard is designed to be accessible and scalable, making it easier for smaller businesses to participate in the sustainability transition without being overwhelmed by complexity.
• Why is it important?
  It reduces administrative effort, improves transparency, and facilitates access to investors, customers, and markets with high ESG requirements. As more supply chains demand ESG disclosures, especially in sectors like manufacturing and retail, SMEs that adopt VSME can position themselves as reliable partners for larger corporations and public tenders.
• How does it work?
  The standard is modular: basic, advanced, and industry-specific ESG metrics can be flexibly integrated as needed. This approach allows companies to start small and expand their reporting as their sustainability journey matures, ensuring relevance and scalability.
• What are the benefits for companies?
  • Building a “green” reputation that resonates with customers and partners.
  • Better chances of collaborating with large enterprises, as many are increasingly requiring ESG data from their suppliers.
  • Early adaptation to future regulations, reducing the risk of non-compliance and costly last-minute adjustments.

With a clear strategy and the right tools, SMEs can efficiently implement the VSME Standard and benefit from sustainable growth in the long term. According to the European Commission, companies that integrate sustainability into their core strategy are up to 20% more likely to experience revenue growth over a five-year period (source).

EFRAG: Voluntary Sustainability Reporting Standard for non-listed SMEs

4 Steps to Implementing the VSME Standard in Your Company

Introducing the VSME Standard requires a clear, structured approach. Here are the key steps to systematically collect sustainability data and identify relevant ESG metrics, ensuring your company is prepared for both current and future demands.

Assessing Your Current Data Collection

First, you should analyze your current sustainability data to identify potential gaps. An overview of the main data areas could look like this:

Once you have completed this analysis, you can select the relevant metrics to enhance your reporting. This foundational step is critical, as research by the Global Reporting Initiative shows that companies with robust data collection processes are 30% more likely to produce high-quality sustainability reports (source).

Selecting Relevant ESG Metrics

The next step is to define the appropriate ESG metrics for your company. Start with basic indicators that serve as the foundation for your reporting. Supplement these with industry-specific metrics that meet your stakeholders’ expectations. This targeted approach ensures that all relevant data is captured and aligns with both regulatory and market-driven requirements.

Careful selection of metrics makes later integration into your systems much easier. For example, a study by McKinsey found that companies focusing on material ESG issues outperform peers by up to 3% in annual returns (source).

Integration into Existing Systems

To ensure your ESG reporting runs efficiently, the following measures should be implemented:

• Use digital tools for automated data collection
• Seamless integration into existing business processes
• Clear assignment of responsibilities

These steps create a solid foundation for reliable sustainability reporting while strengthening your competitive edge. Leveraging digital solutions can reduce reporting time by up to 40%, according to Deloitte (source).

Using VSME for Market Differentiation

The introduction and integration of the VSME Standard offers companies an excellent opportunity to position themselves strategically in the market and stand out from the competition. In an era where sustainability credentials are increasingly scrutinized, VSME compliance can be a key differentiator.

Building a Green Reputation

With VSME, companies can present their sustainability achievements clearly and systematically. Targeted communication of VSME compliance not only boosts credibility but also enhances market presence. Here are some approaches:

With clear and targeted external communication, your sustainability achievements become even more transparent and convincing. According to a 2023 Edelman Trust Barometer survey, 63% of consumers are more likely to buy from companies that are transparent about their sustainability practices (source).

Improving Business Transparency

Standardized reporting according to VSME builds trust with stakeholders by providing clear and comparable information. Thanks to its modular structure, companies can flexibly tailor their sustainability performance to their specific industry and size. At the same time, standardizing ESG data requests reduces effort and improves data quality.

This transparency lays the foundation for unlocking new business opportunities, as many procurement processes now include ESG criteria as a prerequisite for participation (source).

Seizing Business Opportunities

Compliance with the VSME Standard brings tangible benefits, especially when working with large corporations. For example: a medium-sized automotive supplier was able to secure a key contract with a leading car manufacturer thanks to VSME-compliant reporting.

The standard was developed to give small and medium-sized enterprises (SMEs) “better access to lenders, investors, and customers.” For instance, a Berlin-based B2B technology startup secured €2.5 million in funding from sustainability-oriented investors through a structured ESG reporting approach.

Thanks to EU-wide recognition, VSME also makes it easier to access markets with high sustainability requirements, as seen in sectors like public procurement and international supply chains (source).

Future Advantages of VSME Adoption

Meeting Future Requirements Early

Timely adoption of the VSME Standard prepares companies optimally for upcoming regulations. As part of the EU sustainability framework, this standard is becoming increasingly relevant. This foresight helps build a more efficient and sustainable data management system, reducing the risk of costly compliance gaps as new directives such as the Corporate Sustainability Reporting Directive (CSRD) come into force (source).

Optimized Data Management

The VSME Standard provides a clear structure for managing ESG data. Thanks to its modular design, it can be integrated step by step into existing systems. This brings benefits such as:

• Fewer duplicate data sets and more efficient reporting systems
• Higher data quality and reliable results

With these optimized data processes, companies can continuously monitor and better manage their sustainability performance, enabling data-driven decision-making and ongoing improvement.

Performance Tracking Over Time

The VSME Standard enables companies to track their performance using consistent metrics. Since it covers the same sustainability topics as the ESRS, companies benefit from:

• Systematic monitoring of developments
• Goal setting based on historical data
• Benchmarking against industry standards

Additionally, further support materials and events are planned for 2025 to further highlight the importance of structured sustainability management (source).

Fiegenbaum Solutions VSME Services

Fiegenbaum Solutions offers tailored solutions within the VSME Standard framework to help companies turn the standard into a real competitive advantage. Their expertise bridges the gap between regulatory requirements and practical business needs, ensuring a smooth and effective implementation.

Tailored ESG Strategies

Fiegenbaum Solutions develops ESG strategies precisely aligned with the requirements of the VSME Standard. These strategies enable step-by-step implementation that conserves resources and takes into account both industry-specific and individual company needs.

In addition to strategy development, Fiegenbaum Solutions also supports companies with practical implementation, especially in the area of reporting.

Reporting Support

Fiegenbaum Solutions provides hands-on support that significantly reduces the effort required to create VSME-compliant reports. For example, a medium-sized manufacturing company from North Rhine-Westphalia was able to cut its time investment by 40% while improving access to green financing options.

Additionally, processes are optimized through the use of modern digital tools, ensuring that reporting is both accurate and efficient.

Digital Solutions for the VSME Standard

To efficiently meet the requirements of the VSME Standard, Fiegenbaum Solutions implements digital tools specifically designed for reporting:

• Reduce manual entries with intelligent interfaces
• Monitor ESG metrics in real time using dashboards
• Automatically generate VSME-compliant reports

These technologies are seamlessly integrated into existing IT systems to ensure smooth workflows. By combining expert knowledge with technical support, small and medium-sized enterprises can effectively leverage the VSME Standard and drive their sustainable development forward.

FAQs

How Can My Company Benefit from the EFRAG VSME Standard?

The EFRAG VSME Standard: More Than Just a Rule

The EFRAG VSME Standard provides companies with a clear platform to present their sustainable business strategies in an understandable and transparent way. By adopting it, companies can not only meet legal requirements but also sustainably strengthen the trust of investors, customers, and business partners.

A key advantage lies in improved market positioning: companies that openly disclose their sustainable and transparent practices stand out clearly from competitors. In the long term, this increases their credibility and makes them more attractive to various stakeholders. Moreover, compliance with the standard leads to optimized processes and a stronger focus on sustainable growth—a win for everyone involved. For more details, see the official EFRAG VSME Standard.

How Can Companies Successfully Integrate the VSME Standard into Their Existing Processes?

Successful Integration of the VSME Standard

Introducing the VSME Standard into existing business processes requires a well-thought-out and structured approach. The first step is to take a close look at your company’s current workflows. This helps identify where the standard can be applied effectively.

Next, set clear goals and provide the necessary resources. Without clear objectives and the right means, implementation becomes unnecessarily complicated.

Another crucial point is employee training. Only when everyone involved understands the VSME Standard and knows how to apply it will integration be successful. It is also advisable to regularly review and adjust the implementation. This ensures the standard remains effective in the long term and helps you gain a competitive edge.

Fiegenbaum Solutions offers companies tailored consulting for integrating the VSME Standard. With customized strategies and optimization concepts, the company helps make processes more efficient and future-proof.

Which Digital Tools Can Companies Use to Make Reporting According to the VSME Standard More Efficient?

Selecting the Right Digital Tools

The choice of digital tools should always be tailored to your company’s specific needs. Commonly used solutions include software for ESG reporting, data management, and compliance monitoring—all specifically designed to meet the requirements of the VSME Standard. Such tools make it easier to automate processes, collect data consistently, and create reports more efficiently. According to Deloitte, companies that digitize their ESG reporting processes can reduce manual workload by up to 50% (source).

If you are looking for personalized advice to improve your sustainability strategies and reporting, Fiegenbaum Solutions is an excellent point of contact. With deep expertise in ESG strategies and data-driven solutions, Fiegenbaum Solutions helps companies make their operations both sustainable and efficient.