Does VSME apply to your company?

In short

• VSME is an EFRAG standard carried by a non-binding Commission Recommendation. Nothing obliges anyone to use it.
• The question that matters is not whether it applies to you, but whether it caps what your customers may demand.
• The delegated act fixing the content of the voluntary standard was adopted in July 2026 and was still in scrutiny in late August.

In the legal sense it applies to nobody, and that is not a quibble. VSME is a standard written by EFRAG, carried in EU law only by Commission Recommendation (EU) 2025/1710, which binds no one. So the useful question is not whether it applies to you. It is whether it does anything for you, and that comes down to three separate tests: does the value chain cap protect you, is anyone actually going to ask, and is the standard's content settled yet. The answers point in different directions.

Asking whether a recommendation applies produces a confident no and no useful action. The three questions below produce a plan.

Does VSME apply to anyone, in the legal sense?

No, and it is worth being precise about what it is instead.

EFRAG developed the standard at the Commission's request and delivered it in December 2024. Its only current standing in EU law is Commission Recommendation (EU) 2025/1710 of 30 July 2025, which reproduces the standard in Annex I and recommends that non-listed SMEs and micro undertakings that want to report voluntarily use it. A recommendation under Article 292 TFEU has no binding force. The Recommendation's own recital 15 calls it an intermediary solution to address market demand until a voluntary standard based on EFRAG's work is adopted by delegated act.

That is why the two most common statements about it are both wrong. It is not a Commission standard, and it is not an EU regulation. Anyone describing it as either is working from a summary rather than the instrument.

So what is the question you should actually be asking?

Whether it changes your position. Here are the situations we see, and what the standard does in each.

Notice that the answer in column two is no on every row. Every difference between the rows lives in column three.

Does the protected undertaking definition cover you?

This is the test that actually matters, and it is not the CSRD scope test.

Directive (EU) 2026/470 defines a protected undertaking as one that does not exceed, on its balance sheet date, an average of 1,000 employees during the preceding financial year, and that is in the value chain of a reporting undertaking. Two limbs. Headcount, and position in someone's chain.

There is no turnover limb, which produces a result people find counter-intuitive when they first meet it. A business with EUR 800 million of turnover and 250 staff is protected. A business with EUR 70 million of turnover and 1,150 staff is not, despite being nowhere near the reporting thresholds itself. Failing the CSRD turnover test gets you out of reporting. Only the headcount number gets you the ceiling.

Where the definition does cover you, what it gives you is specific. The right to decline to provide information exceeding the voluntary standard, in response to a request made for the purpose of sustainability reporting under the Accounting Directive. A prohibition on the reporting company requiring more. A rule that any contractual provision to the contrary is not binding. And a duty on the customer to tell you which items exceed the standard and that the right exists. We go through how to use it in which ESG questions you can refuse.

Is anyone actually going to ask you?

Probably, and the reason is structural rather than fashionable.

A company inside CSRD has to report value chain information, has to include scope 3 for every significant category that is a priority for it, and is told by ESRS 1 to estimate with sector averages and proxies where it cannot collect data. Estimation is the expected route rather than the failure mode. But estimates are weaker than measurements, so the incentive to ask suppliers survives intact.

That is why the supplier questionnaire outlived the narrowing of the rule that produced it. The population that must report shrank sharply in February 2026. The population being asked did not.

The practical read: if you sell to large European corporates, assume a request. If you sell to consumers or to small businesses only, you may genuinely never see one, and adopting a reporting standard on spec is a real cost with no counterparty.

Is the standard's content even settled yet?

Not entirely, and anyone telling you the final datapoint list is being optimistic.

Article 29ca of Directive 2013/34/EU, inserted by Directive (EU) 2026/470, requires the Commission to establish sustainability reporting standards for voluntary use by delegated act, based on Commission Recommendation (EU) 2025/1710 in its original version. The Commission adopted that act on 3 July 2026 as C(2026) 5011, titled as establishing standards for voluntary use by undertakings protected by the value chain cap. Its Article 4 states that Article 3 applies from financial years beginning on or after 1 January 2027.

On 28 August 2026 it was still in Parliament and Council scrutiny, and an act in scrutiny is not in force. So the architecture is settled and the exact height of the ceiling is not yet law.

What follows practically is reassuring rather than alarming. The standard the Recommendation carries has a basic module and a comprehensive module, and reporting the basic module is a prerequisite for the comprehensive one. Building to the basic module is not a bet on an unfixed text, because the delegated act is required to be based on the recommended version. The VSME standard is where we track what is settled and what is not.

What if you are in CSRD scope yourself?

Then the standard is not your reporting standard, and it is still your problem.

You report under the ESRS. But the ceiling constrains what you may require from suppliers below 1,000 employees when you are gathering data for that report, and it imposes a duty on you to flag which of your requests exceed it. A supplier questionnaire drafted before February 2026 almost certainly does not do that.

The self-declaration rule makes compliance cheap on your side. You may rely on a supplier's declaration of its size and need not verify it, unless you know the declaration is manifestly incorrect. So a size question at the top of the questionnaire, and a marked section for anything above the standard, is most of what is needed.

What should you do now?

Answer the three questions in order and act on the first one that returns a yes.

If you are protected and a request has landed, do not start by refusing. Produce the report, ask the customer to confirm the purpose of the request, and ask them to mark the excess. VSME consulting is the shortcut for the parts of a report that are not emissions.

If you are protected and nothing has landed, build the emissions number and stop there. It is the disclosure every customer presses on, it has the longest lead time, and it is useful even if no one ever asks.

If you are over 1,000 employees and outside CSRD, you have neither duty nor ceiling. A credible inventory and a firm commercial line is the entire strategy, and it works.

You can build the emissions half yourself on a free account, with no sales call. The platform page states 5,000+ users, and it covers more than 20,000 spend-based and activity-based factors and lets you add supplier-specific data where you have it. If you are still comparing tools, our SME software comparison is the neutral version.

One limit to know before you decide. A Small Business reviewer on G2 said in August 2026 that there is no forecasting, and that we had told them it is on the development list. If what you need is a projection rather than a measured footprint, this is not it yet.

Sources: Commission Recommendation (EU) 2025/1710 recitals 15 and 16, Directive (EU) 2026/470 including new Article 29ca and Articles 19a(3) and 29a(3) of Directive 2013/34/EU, Commission Delegated Regulation C(2026) 5011 as adopted and not in force, Delegated Regulation (EU) 2023/2772 ESRS 1. Verified 28 August 2026.

Facts on this page were last verified on 2026-08-28.