The VSME standard: A simple path to ESG reporting for SMEs
Sustainability reporting requirements are constantly increasing - especially for small and medium-sized enterprises (SMEs), which are increasingly required to provide ESG data by investors, business partners and financial institutions. The VSME standard (Voluntary SME Standard) was developed by the European Commission to provide SMEs with an efficient and practical solution for fulfilling their ESG reporting obligations.
This standard creates a clear structure for sustainability reporting and significantly reduces the bureaucratic burden. At the same time, it is based on existing regulatory requirements such as Pillar III and the Sustainable Finance Disclosure Regulation (SFDR). This ensures uniform reporting between companies and financial institutions.
Why the VSME standard is important for SMEs
The VSME standard provides companies with a structured and comprehensible framework for ESG reporting. As more and more banks and investors are incorporating sustainability criteria into their financing decisions, transparent reporting is becoming a decisive competitive advantage.
A key feature of the VSME standard is the so-called "shielding" mechanism. Companies that report in accordance with this standard automatically fulfill the ESG data requirements of banks, investors and business partners. This ensures that SMEs do not have to prepare multiple different ESG reports, but can serve all relevant stakeholders with a single standardized report.
The three steps to VSME-compliant reporting
The VSME standard follows a clear structure with three central steps:
1. define reporting limits
Before a company starts reporting, the organizational and content-related boundaries must be defined. The VSME standard is based on financial reporting. This means that both the scope of consolidation and the time frame should be identical to those of financial reporting. This ensures direct comparability between financial and non-financial information.
In addition, the content of the relevant ESG issues that are of importance to the company is determined. A simplified materiality analysis is used to help companies systematically record relevant environmental, social and governance issues.
2. collect key figures
Once the reporting boundaries have been defined, companies must collect their sustainability indicators. The VSME standard distinguishes between two modules:
- Basic Module (B1-B11): This module contains basic ESG disclosure requirements, including information on energy consumption, emissions, water and resource use, biodiversity and working conditions.
- Comprehensive Module (C1-C9): This extended module contains more detailed information on ESG strategies, climate risks, human rights violations and gender diversity in management positions. Companies that require additional information from investors or banks can use this module as a supplement.
The key figures collected must be precise, comparable and verifiable in order to ensure high quality and traceability of reporting.
3. integrated reporting
The collected ESG data is then transferred into a sustainability report. This can either be published as a stand-alone document or integrated into the company's management report.
Consistency with financial reporting is particularly important here. Companies must ensure that their ESG data covers the same reporting period as the financial figures. This promotes comparability and enables seamless integration of sustainability and financial reporting.
In addition, the VSME standard sets out clear requirements for the provision of comparable data from the previous year in order to create transparency about developments and progress in the area of ESG.
Conclusion: Why the VSME standard is the future of SME reporting
The VSME standard provides SMEs with a structured, practical and flexible tool for fulfilling their ESG reporting obligations. Companies benefit from standardized reporting that facilitates access to sustainable financing and ensures compliance with regulatory requirements.
As the European Commission is planning the VSME standard as a delegated act, it will become a "de facto" standard for SMEs in the future. Small companies should therefore familiarize themselves with the requirements at an early stage and align their ESG reporting accordingly.
How cubemos supports companies
cubemos offers digital solutions for ESG reporting and supports companies in recording their key sustainability figures efficiently and in compliance with the law. While large companies are supported with CSRD reporting, SMEs receive customized solutions for reporting in accordance with the VSME standard.
Take advantage of automated and standardized ESG reporting now - we will be happy to advise you!
