VSME Sustainability Reporting: Choosing Between Basic and Comprehensive Modules for SMEs

The VSME standard offers small and medium-sized enterprises (SMEs) two modular options for sustainability reporting: Basic and Comprehensive. Your choice depends on your company’s goals, resources, and requirements, as well as the evolving landscape of sustainability expectations. Here’s a quick overview of the key differences:

• Basic Module:
  • 11 core indicators
  • Entry-level for basic ESG reporting
  • Ideal for SMEs with limited resources or just starting out in sustainability
• Comprehensive Module:
  • 20 indicators (including the 11 core indicators from the Basic Module)
  • Advanced ESG reporting for ambitious sustainability goals
  • Suitable for companies with more complex requirements or a focus on climate change and green growth

Quick Comparison

Which Solution Is Right for You?

• Choose Basic if you are starting your ESG reporting or have limited resources.
• Opt for Comprehensive if you need detailed data, are seeking green financing, or manage complex supply chains.

The modular structure of the VSME standard allows for a flexible start and adaptation to future requirements. Begin with the Basic Module and upgrade to Comprehensive as needed, ensuring your reporting evolves alongside regulatory and stakeholder expectations. According to the IFRS Sustainability Disclosure Standards, modular approaches like VSME help SMEs gradually build capacity for more robust sustainability disclosures (https://www.ifrs.org/projects/completed-projects/2023/ifrs-sustainability-disclosure-standards/).

Module Features Compared

Key Features

Based on the main differences between the modules, here’s a closer look at their specific functions. The Basic Module covers the essential ESG data points, including:

• Energy consumption
• Workforce structure and compensation
• Anti-corruption compliance
• Environmental metrics

The Comprehensive Module builds on the Basic Module and also offers strategic features such as:

• Detailed climate strategies
• Human rights assessments
• Industry-specific sustainability data

Notably, the Comprehensive Module aligns with growing investor and regulatory demands for granular ESG data. For example, the Global Reporting Initiative (GRI) recommends sector-specific disclosures and in-depth climate risk assessments, both of which are supported by the Comprehensive Module (https://www.globalreporting.org/standards/).

Feature Comparison

The table below gives an overview of the capabilities of both modules:

Important Notes on Module Selection

A company must first implement the Basic Module before accessing the advanced features of the Comprehensive Module. This modular structure makes it easier to choose the right solution for specific ESG and sustainability strategies. Economic forecasts highlight the potential of these modules: By 2028, the annual benefits of adopting VSME could exceed €2.6 billion, reflecting both direct cost savings and enhanced access to sustainable finance (https://www.europarl.europa.eu/RegData/etudes/BRIE/2022/698889/EPRS_BRI(2022)698889_EN.pdf).

When Should Each Module Be Used?

Requirements of Small and Medium-Sized Enterprises

The Basic Module is ideal for small and medium-sized enterprises (SMEs) taking their first steps in sustainability reporting. It offers a practical solution for:

• Capturing basic ESG data
• Accessing sustainable financing options
• Meeting requirements as a supplier to larger companies
• Resource-efficient and streamlined reporting

By systematically capturing and clearly communicating sustainability performance, SMEs can boost their competitiveness. According to the OECD, SMEs that adopt basic ESG reporting practices are more likely to access green loans and participate in global supply chains (https://www.oecd.org/cfe/smes/).

Needs of Large Organizations

For companies with a mature ESG strategy, the Comprehensive Module offers a wide range of advanced features. With around 100 ESG data points, it supports:

• Developing detailed climate strategies
• Meeting specific investor requirements
• Credible supply chain representation
• Developing long-term ESG strategies

According to a recent McKinsey study, 25% of executives achieved significant progress toward their sustainability goals last year, with those using advanced ESG modules reporting higher stakeholder trust and improved risk management (https://www.mckinsey.com/capabilities/sustainability/our-insights/the-state-of-corporate-sustainability-reporting).

The VSME+ concept allows you to flexibly combine both modules and add individual, company-specific indicators. The first step should be the systematic collection of existing ESG data. Identify potential gaps and analyze industry-specific requirements. This foundation helps you select the right module and ensure successful implementation.

Guide to Module Selection

Reviewing Existing Systems

To select the right VSME module, it’s important to first conduct a thorough analysis of your current ESG structures. Here are some key criteria to consider when assessing your current situation:

This analysis serves as a basis for choosing a module that not only meets current requirements but is also prepared for future developments. As regulatory frameworks such as the ESRS expand, companies with robust ESG data systems will be better positioned to adapt (https://www.efrag.org/sites/default/files/sites/webpublishing/SiteAssets/ESRS%20Standards.pdf).

Growth Planning

After reviewing existing systems, strategic growth planning helps determine the right module for the future. Your business strategy plays a central role. It’s important to choose a module that meets today’s needs and supports future growth.

Key Growth Factors:

• Market Positioning: With 11 core indicators, the Basic Module provides a solid foundation for ESG activities.
• Investor Perspective: Companies with ambitious growth plans benefit from the Comprehensive Module, which covers around 100 ESG data points and enables deeper insights.
• Industry Development: The growing importance of ESG criteria requires forward-thinking planning. The Comprehensive Module offers greater adaptability to future requirements.

Another crucial point is scalability: While the Basic Module enables an efficient entry point, the Comprehensive Module offers additional options for companies looking to grow and evolve. The module choice should always align with your company’s long-term goals.

Voluntary Sustainability Reporting Standard for non-listed SMEs

Make Your Decision

Based on the previous analysis of module features, you can select the module that best fits your company’s situation. Two practical examples show how companies of different sizes can benefit from choosing the right module:

A mid-sized logistics company with 150 employees chose the Comprehensive Module to achieve its ambitious sustainability goals. Aiming to reduce greenhouse gas emissions by 20% by 2030 and with an established human rights policy, the company was able to secure green financing. See our unlocking ESG value guide for more insights.

In contrast, an IT service provider with 30 employees selected the Basic Module to efficiently capture key ESG metrics such as workforce structure and training programs. This solution was particularly resource-efficient and ideally matched the company’s needs.

To further support your decision, the following overview compares the two modules:

An important aspect when choosing is to keep future requirements in mind. The Comprehensive Module offers more flexibility to meet growing stakeholder expectations and regulatory changes. Companies that will be subject to ESRS (European Sustainability Reporting Standards) in the future can benefit strategically from the Comprehensive Module. It enables a structured approach and eases the transition to more comprehensive reporting standards. Learn more in our comprehensive ESRS guide.

FAQs

What advantages does the Comprehensive Module offer compared to the Basic Module for companies with ambitious sustainability goals?

The Comprehensive Module: More Depth for Your Sustainability Goals

The Comprehensive Module offers clear advantages for companies looking to take their sustainability strategies to the next level compared to the Basic Module. With the ability to capture up to 100 specific data points, it provides crucial insights that are especially valuable for investors and banks. This extensive data collection creates a solid foundation for making informed decisions and strategically advancing ESG initiatives. According to the CDP, companies that report in-depth ESG data are 30% more likely to attract sustainable investment and demonstrate resilience against regulatory changes (https://www.cdp.net/en).

In addition, the module provides detailed information on climate-related risks, policies, and measures. This makes it easier to credibly communicate progress and proactively prepare for future regulatory requirements. For companies aiming to position themselves as ESG leaders, the Comprehensive Module is an indispensable tool for pursuing sustainability goals even more effectively.

How can companies efficiently transition from the Basic to the Comprehensive Module?

Efficient Transition from Basic to Comprehensive Module

To ensure a smooth transition, companies should first take a close look at their existing ESG data and processes. The goal is to identify both strengths and potential weaknesses. Based on this, a clear transition plan can be developed to sensibly expand and optimize existing structures. Employee training plays a central role here. Only when everyone involved understands the new requirements can they be successfully implemented. It’s also wise to involve stakeholders early on. Regular feedback from these groups helps keep the process flexible and ensures that the company’s objectives are met.

Data analysis tools can also be a valuable support. They not only help optimize reporting but also ensure compliance with ESG requirements. Consider exploring our marketing tech consulting services for efficiency gains. According to Deloitte, companies that invest in ESG data management systems reduce reporting errors by up to 40% and accelerate compliance with new standards (https://www2.deloitte.com/global/en/pages/risk/articles/esg-reporting.html).

A well-thought-out, structured transition minimizes risks and ensures that the Comprehensive Module provides real added value for the company’s sustainability strategy.

What criteria are important when choosing between the Basic and Comprehensive VSME Module?

Choosing Between the Basic and Comprehensive VSME Module

The decision as to whether the Basic or Comprehensive VSME Module is more suitable depends on several factors that should be carefully considered:

• Company Size and Experience: For companies just starting out with their sustainability strategy, the Basic Module is a good choice. It provides a solid foundation without being overwhelming. For organizations already pursuing advanced ESG goals, the Comprehensive Module is the better option, as it offers more extensive features.
• Reporting Obligations and Data Requirements: Companies needing detailed ESG data for investors or banks benefit from the expanded reporting options of the Comprehensive Module. It enables more precise and in-depth data collection to meet rising demands.
• Available Resources: The choice of module should also depend on whether your team has the capacity to effectively implement and operate a more complex tool like the Comprehensive Module. If resources are limited, the Basic Module may be more suitable.
• Long-Term Sustainability Goals: The module should support your strategic ESG objectives while meeting stakeholder expectations. Consider which module best fits your long-term vision.

Ultimately, the choice of module should be based on how well it fits your company’s specific requirements and goals. A thorough analysis will help you make the best decision and achieve the greatest benefit for your sustainability strategy.