Press Release - EFRAG Welcomes European Commission’s Recommendation on VSME

EFRAG welcomes the European Commission’s adoption in the form of Recommendation for the Voluntary Sustainability Reporting Standard for non-listed Micro-, Small-, and Medium-sized Enterprises (VSME) released by EFRAG in December 2024. This Standard, developed by EFRAG for undertakings with less than 250 employees, as part of the 2023 SME Relief Package (Action 14), provides a simple and streamlined framework for non-listed SMEs to report sustainability-related information.

The objectives of the VSME Standard are to help SMEs:

  1. provide information to satisfy data requests from large undertakings;
  2. provide information to banks and investors, and hence improving the SMEs’ own access to finance;
  3. better manage their sustainability issues, supporting their competitiveness in the short-, medium and long-term;
  4. contribute to a more sustainable, inclusive economy.

A Two-Module Approach for Proportionate Reporting for Micro, Small, and Medium SMEs

The VSME standard is structured around two distinct modules:

  • The Basic Module, intended as the entry-level for all SMEs, is the target module for micro undertakings (SMEs with less than 10 employees). This module comprises 11 disclosures and focuses on key sustainability indicators that are most required by value chain partners. It includes core disclosures on GHG emissions (Scope 1 and 2), environmental metrics own-workforce, and anti-corruption.

  • The Comprehensive Module builds on the Basic Module and focuses on 9 additional disclosures often requested by banks, investors and value chain partners to SMEs undertakings. For example, this module covers a short description of ESG practices or future initiatives (disclosure C2), GHG reduction targets and transition plans (disclosure C3), confirmed value chain incidents (disclosure C7), and exclusion from EU reference benchmarks (disclosure C8). VSME does NOT require a materiality assessment and promotes flexibility and usability by allowing undertakings to apply only what is relevant to their operations – the “if applicable” conditionality. The modular structure ensures consistency with ESRS for large undertakings, and alignment to Sustainable Finance Regulations (SFDR, EBA ESG pillar 3, and Benchmark regulation) through a significantly simplified framework.

Digital Tools, Templates and Support Materials

To facilitate the application of the VSME, EFRAG has developed a digital VSME Excel- template and XBRL taxonomy along with an XBRL converter to support automated, machine-readable disclosures. These tools are available on the dedicated EFRAG webpage and will be updated to reflect the EC recommendation and enable using multiple languages in the coming weeks. In addition, EFRAG is conducting a mapping of available tools, such as GHG calculators, to help SMEs in their reporting efforts. EFRAG is simultaneously working on the development of three guides to support the preparation of the following disclosures in the Comprehensive Module:

  • C2 – Description of practices, policies and future initiatives for transitioning towards a more sustainable economy: examples of practices, policies, and future initiatives.

  • C3 – GHG reduction targets and climate transition: step-by-step guide on how to draft GHG reduction targets and transition plans (for an SME).

  • C7 – Severe negative human rights incidents – examples of value chain-related severe negative human rights incidents.


Patrick de Cambourg, EFRAG SRB Chair, stated:

“With today’s Recommendation, the Commission has acknowledged the critical role of SMEs in the economy. The Recommendation reflects the VSME standard developed by EFRAG providing a robust yet flexible framework that is both technically sound and accessible. It strikes the right balance between market relevance and proportionality. We count on banks, investors and business counterparts to refer to the KPIs of VSME in their questionnaires, to avoid uncoordinated data requests”

Chiara Del Prete, EFRAG SR TEG Chair, added:

“The VSME standard reflects EFRAG’s extensive market analysis and much participated dialogue with SMEs representatives and with their lenders, investors and commercial counterparts. This led to a consolidation exercise and now, with the EC Recommendation, VSME is now the reference point for standardized data demands. The Recommendation will serve to further stimulate its adoption and this is pivotal for the realization of the expected benefits of the standard. The Digital Template will allow the SME ecosystem to quickly adopt the new reporting standard and enable machine-readable reporting.”


To mark the launch and discuss next steps, EFRAG will host a dedicated public event in September 2025, featuring EU policymakers, SME representatives, financial stakeholders, and sustainability experts. The event will provide practical insights into implementation and highlight real-world use cases.

For updates on the event and to access explainer videos, guidance, and digital tools, please visit EFRAG’s VSME webpage.

Access also the European Commission’ s dedicated Q&A and related materials..