On 30 July, in a significant move to streamline sustainability reporting for smaller businesses, the European Commission has officially adopted the Voluntary Sustainability Reporting Standard for Non-Listed Micro-, Small-, and Medium-Sized Enterprises (VSME) as an official Recommendation.
This milestone marks an important advancement in strengthening the role of SMEs in the EU’s broader sustainability reporting landscape and in protecting them from a trickle-down effect from the reporting obligations of larger structures. It also adds clarity in view of the Omnibus simplification exercise of the Corporate Sustainability Reporting Directive, currently under way.
Following several delays in the process, the publication of the VSME standard reinforces the credibility and stability needed by SMEs to adapt, paving the way for its widespread market acceptance. The new Recommendation sends a clear and unified message to the market: the VSME should serve as the single standardised framework for sustainability disclosures from SMEs. In doing so, it aims to replace the current patchwork of fragmented questionnaires often imposed by banks, investors, and business partners. This pile of procedures constitutes an administrative burden that SMEs have long struggled to manage. Importantly, the Recommendation calls on EU Member States to raise awareness, promote the VSME’s use, and collaborate with national business organisations to provide training and outreach to SMEs.
Developed by EFRAG, the VSME is the result of extensive debate between stakeholders including large corporations, sustainability consultants, financial institutions, and SME representatives, notably SMEunited. SMEunited welcomed the Commission’s action, noting that the recommendation not only supports SMEs but also encourages banks and investors to limit their requests to the datapoints defined in the VSME, reducing duplication and confusion. SMEunited is also advocating for the template to evolve into a digital reporting system, integrated with calculation tools to further simplify the process.
EBC welcomes the adoption of the VSME and strongly encourages its immediate uptake by all actors concerned to simplify and facilitate voluntary SME reporting. EBC supported the work of SMEunited in shaping the VSME in the context of the work done in EFRAG and will continue to bring forward the point of view of construction SMEs in the context of the ongoing simplification efforts.
To find out more about the Commission Recommendation on the VSME, click here.
