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The basics of the VSME standard
What does the VSME standard regulate?
The VSME standard (Voluntary Sustainability Reporting Standard for Small and Medium-sized Enterprises) was developed specifically to enable small and medium-sized enterprises to produce practicable, resource-efficient and credible sustainability reporting. Compared to more complex frameworks such as the ESRS, the VSME focuses on simplification without losing sight of the requirements of business partners, banks or investors. The aim is to ensure transparency, comparability and practicability, even for smaller companies. You can find a clear comparison between VSME and ESRS here: VSME and ESRS - how to make the switch at a later date.
Practical tip: VSME report in response to ESG questionnaires from banks
- Banks are increasingly demanding ESG evidence, e.g. via questionnaires.
- A VSME report covers the most important ESG topics in a structured manner and can be used directly as a standardized response.
- You save time and avoid repetitive individual questions - the report is increasingly accepted by banks.
- A VSME report improves creditworthiness and shows banks and business partners that your company acts sustainably.
- With the VSME standard, you are also prepared for future regulatory requirements.
Conclusion: With a VSME report, you reduce your administrative workload and strengthen your position when it comes to financing.
Who is the standard intended for?
The VSME standard is aimed at all SMEs that are not yet directly subject to statutory reporting obligations but would like to voluntarily provide their customers, business partners or banks with sustainability information. It is equally suitable for manufacturing companies, service providers, craft businesses and start-ups. SMEs that are part of complex supply chains or want to position themselves early on for upcoming tenders and financing opportunities will benefit in particular.
Differentiation from other standards (e.g. LSME, GRI)
In contrast to comprehensive frameworks such as the ESRS or GRI, the VSME standard is specifically tailored to the needs and possibilities of smaller companies. The requirements are leaner, more practice-oriented and can be implemented with less bureaucratic effort. Companies that later have to switch to mandatory standards such as ESRS benefit from the structures and processes that have already been established - read more: How to make the switch later on.
VSME report in 6 steps for SMEs
Step 1: Report boundaries and module selection
At the beginning, SMEs determine which company divisions and locations are to be included in the reporting. At the same time, a decision is made as to whether the basic module or an extended module of the VSME standard will be used:
| Criterion | Basic Module (B1–B11) | Additional Module (C1–C9) |
|---|---|---|
| Target Group | Non-listed micro, small and medium-sized enterprises – especially SMEs that need to meet ESG requirements without CSRD obligation | Medium-sized companies with higher stakeholder expectations (e.g. banks, major clients, investors) that require deeper ESG transparency |
| Function | Entry-level module, minimum requirements | Supplement to the Basic Module, for more in-depth sustainability reporting |
| Content (Disclosures) | • B1: Basis for preparation • B2: Practices, policies and initiatives • B3: Energy and greenhouse gas emissions • B4: Pollution • B5: Biodiversity • B6: Water consumption and water stress • B7: Resource use, circular economy and waste • B8: Workforce – General information • B9: Health and safety • B10: Remuneration, collective bargaining, training • B11: Corruption and bribery |
• C1: Business model and strategy • C2: Extended ESG practices and responsibilities • C3: Climate targets and transition plans • C4: Climate risks • C5: Extended workforce disclosures • C6: Human rights policy • C7: Severe human rights violations • C8: Revenue from critical sectors and EU benchmark exclusions • C9: Gender ratio in governing body |
| Scope | 11 disclosure requirements | 9 disclosure requirements |
This decision determines the scope of data collection and the depth of reporting.
Company profile, environment, social issues, simple governance issues
Value chain, suppliers,
detailed environmental/social governance
Supplementary indicators for sectors (e.g. construction, trade, production)
Step 2: Initial assessment and selection of topics
In the next step, companies analyze their current sustainability practices and assess which ESG issues are relevant for them and their stakeholders. A comprehensive materiality analysis is not mandatory under VSME, but is recommended in order to specifically identify the most important fields of action and to design efficient reporting. Typical topics include energy consumption, CO₂ emissions, working conditions and the supply chain. Involving relevant stakeholders such as employees, customers or suppliers creates additional acceptance and relevance. You can find out more about materiality analysis here: What is a materiality analysis?
Step 3: Data collection and internal reporting system
The required data on the selected ESG topics is now collected in a structured manner - for example on energy, emissions, social indicators or governance. Digital tools and clearly defined processes make data collection easier, even for small companies.
Step 4: Writing and releasing the report
The collected information is then prepared in a structured manner and the actual sustainability report is created. The VSME standard focuses on comprehensibility and practicability - the report should be transparent, authentic and free of "greenwashing".
Step 5: Publication and communication
After internal approval, the report is published in a way that is appropriate for the target group - for example on the company website, in newsletters or in communication with business partners. Clear and comprehensible communication of the most important results strengthens trust and market positioning.
Step 6: Continuous improvement
VSME reporting is designed as an annual process. With each reporting period, companies can compare their key figures, document progress and further develop their sustainability strategy in a targeted manner. This makes potential for improvement visible at an early stage and strengthens competitiveness in the long term.
What does a VSME report cost?
- The costs depend on the scope, company size and depth of reporting.
- A simple VSME report is usually possible from 10,000 to 15,000 euros - depending on the consultation and effort involved.
- More comprehensive or regularly updated reports (e.g. with an external expert check) can be more expensive.
- Software tools and modular offers help to reduce effort and costs.
- For a specific offer, we recommend contacting specialized consultancies or software providers.
Tip: The costs are usually significantly lower than for comprehensive CSRD reports for large companies.
Challenges and solutions
Typical hurdles for SMEs
Many SMEs face similar challenges when it comes to sustainability reporting: limited human and financial resources, a lack of expertise and difficulties in accessing relevant data. The complexity of regulatory requirements and the large number of data points - particularly in the case of standards such as CSRD or ESRS - can quickly become overwhelming. Uncertainties in dealing with new requirements and setting up efficient processes are further stumbling blocks.
Focus on core topics and lean processes
SMEs should initially focus on their core topics - i.e. those sustainability aspects that are particularly relevant to their industry, business partners and stakeholders. A minimalist approach with lean processes, clear responsibilities and realistic targets is often more effective than detailed, over-ambitious reporting. The use of industry-specific guidelines, digital workflows and networking help to reduce effort and costs and ensure the quality of reports.
Best practices and examples
Successful reports from SMEs: What makes them stand out?
Successful sustainability reports from SMEs impress with their authenticity, clear communication and consistent stakeholder orientation. They concentrate on the topics that are really relevant for the company and its partners and avoid unnecessary formalism or "greenwashing". Reports that disclose specific measures, progress and challenges are particularly effective - even if not all targets have been achieved.
Authenticity, stakeholder orientation and clear communication
Credibility is created by dealing openly with challenges and communicating development areas honestly. Transparent reports focus on the needs of employees, customers and partners and show how the company is responding to their expectations. Actively involving the most important stakeholders - for example through surveys, workshops or feedback rounds - creates long-term trust and increases acceptance of the sustainability strategy.
VSME roadmap for SMEs
6 steps to a sustainability report
| First step | What to do? | Concrete | Duration |
|---|---|---|---|
| 1️⃣ CHECK | Check reporting obligation |
- >250 employees? - Major customer requires it? - Bank requires it? |
1 day |
| 2️⃣ TEAM | Determine who is responsible |
- Project management - Data collector (HR, facility, accounting) - 2-4 people are sufficient |
1 week |
| 3️⃣ DATA | Collect numbers |
Minimum: - Electricity/gas bills - Employee figures - Waste quantities - Vehicle data |
2-3 months |
| 4️⃣ FOKUS | Define topics |
Mandatory: VSME basic module Optional: 1-2 additional topics → Start small! |
2 weeks |
| 5️⃣ WRITING | Create a report |
- 15-30 pages - Use a template - Simple language |
1-2 months |
| 6️⃣ DONE | Publish |
- PDF on website - To customers/banks - Communicate internally |
1 week |
Secure Your Lead – with Your VSME Reporting
VSME reporting is your gateway to new customers, financial benefits, and strong partnerships. Seize the opportunity to stand out competitively with clear sustainability communications and to be prepared for regulatory changes.
✅ Immediate Impact
Better credit terms, faster customer acquisition, fewer ESG inquiries
🚀 Future-Proof
Ready for upcoming regulation and building internal sustainability expertise
💡 Easy Implementation
Step by step, modular, and with predictable costs
🤝 Credible & Transparent
Stronger stakeholder relationships through authentic communication
Make the difference – act now!
The best opportunities belong to the bold: Start your VSME reporting today and get ahead of the competition.
Sustainability consultant for companies & start-ups
With over 10 years of experience in ESG and tech strategies, he supports companies in their entry into voluntary reporting.
About the person
FAQ - VSME reporting for SMEs
How often should a VSME sustainability report be prepared?
The VSME standard recommends annual reporting. Even if this remains voluntary for SMEs, regular updates ensure that data remains up-to-date and progress can be communicated continuously.
What data is relevant for VSME reporting?
Relevant data concerns the most important environmental, social and governance topics (e.g. energy consumption, emissions, working conditions, supply chains). The VSME standard offers a modular structure: the basic module covers basic key figures, the extended module enables more detailed reporting - depending on the needs and capacity of the company.
What is a materiality analysis and how does it work?
A materiality analysis helps to identify the topics that are most important to the company and its stakeholders. It is a key step in focusing reporting on the essentials and addressing the requirements of customers, banks or investors in a targeted manner.
Is there an obligation for SMEs to report in accordance with VSME?
For most SMEs, there is currently no legal obligation to report on sustainability in accordance with VSME. Reporting is voluntary, but is becoming increasingly important due to requirements from customers, banks and along the supply chain. A structured report in accordance with VSME helps to respond to requests efficiently and in a standardized manner and to secure competitive advantages. You can find out more about the legal basis here: ESRS standards - 68% less datapoints starting 2025.
How do I get started with the VSME report?
The best way to get started is step by step - from defining the report boundaries and selecting modules to materiality analysis, data collection and publication. You can find a practical step-by-step guide here: VSME report: Get started in 5 steps.