In short
- The boundary decides the number. Settle it before any arithmetic starts.
- Give both the location-based and the market-based scope 2 figure, because your customer has to report both.
- If you send nothing, your customer is required to estimate your emissions from sector averages. That proxy is rarely kind.
Almost every VSME disclosure can be written from things you already know about your business. The greenhouse gas disclosure cannot, because it is arithmetic rather than description. It needs a boundary decision, an activity dataset, an emission factor for every line, and a source record behind every input. It is also the disclosure your customer will look at first, because it is the only one that feeds directly into a number they have to publish themselves. Everything below is about getting that figure right the first time.
Why is this the only VSME disclosure that needs a calculation?
Because the others ask you what you do, and this one asks you how much.
VSME is an EFRAG standard carried by Commission Recommendation (EU) 2025/1710, which is non-binding and confirms that a self-declaration by the SME is sufficient with no assurance obligation. That means nobody audits the figure. It does not mean nobody checks it. The person reading it is a sustainability or procurement analyst at a large customer who is about to fold your tonnage into their own inventory, and they will notice a boundary that is missing, a scope 2 figure on only one basis, or a total that does not reconcile with the year before.
The rest of the standard is a description of your business. This part becomes part of somebody else's accounts. That asymmetry is why it deserves more care than its length in the standard suggests. For the standard as a whole, start with what VSME is and what your customer may actually ask for.
What decides the number before you calculate anything?
The boundary, and it is worth more thought than the factors are.
Two questions settle it. Which legal entities are inside the reporting company, and how do you treat the ones you only partly control. The convention that large reporters use is worth borrowing even though it does not bind you, because it is the convention your customer is working to. Under ESRS 1 the sustainability statement is prepared for the same reporting undertaking as the financial statements, and for greenhouse gases specifically ESRS E1 includes associates, joint ventures, unconsolidated subsidiaries and jointly controlled operations according to the extent of the undertaking's operational control, at 100 percent of the emissions of an entity it operationally controls rather than at its equity share.
For an SME that has one legal entity and three sites, this is a five-minute decision. For a group with a joint venture and a minority holding, it is the whole project, and getting it wrong means every subsequent year either carries the error or needs a restatement that reads as a correction.
Write the boundary down in one paragraph and put it at the top of the disclosure. A stated boundary that a reader disagrees with is a conversation. An unstated boundary is a rejection.
Does scope 2 need one figure or two?
Give two. It costs you almost nothing and it saves your customer a request.
A CSRD reporter has to disclose gross scope 2 on both bases under ESRS E1-6: the location-based figure and the market-based figure, with the total then presented on both bases. If your number is going into their consolidation and you supply only one, they will come back for the other, or worse, they will estimate it.
The two differ whenever you buy certified renewable electricity. The location-based figure uses the grid average where the electricity was consumed. The market-based figure reflects the contracts you actually hold. Companies that have bought green power sometimes want to publish only the market-based number because it is smaller. Publish both and say which is which. A single unlabelled scope 2 figure is the single most common thing that gets a supplier submission sent back.
How much of scope 3 do you actually need?
Less than the fifteen categories, and more than nothing.
ESRS E1-6 does not require a reporter to cover all fifteen categories. It requires each significant category, meaning each category that is a priority for that undertaking. Your customer is therefore not chasing completeness. They are chasing the few categories that dominate their own total, and for most of them that is purchased goods and services, which is where you sit.
So the practical question is not "how much scope 3 should I calculate" but "which category am I to them, and which categories dominate me". A haulier is transport. A component maker is purchased goods. Answer that, calculate the one or two categories that follow, and say clearly which categories you have not covered. Selective and labelled beats broad and vague every time. If the requests are pushing further upstream, that is what scope 3 consulting exists for.
What happens if you send nothing?
Somebody calculates a number for you, and you will not like it.
Where a reporting undertaking cannot collect value chain information after reasonable efforts, ESRS 1 paragraph 69 requires it to estimate that information using all reasonable and supportable information, such as sector-average data and other proxies. Estimation is the rule in the standard, not the failure mode. Which means the absence of your figure does not produce a gap in your customer's report. It produces a sector-average figure attributed to you, calculated from your invoice value, with no credit for anything you have actually done.
This is the strongest commercial argument for doing the calculation at all, and it is the one most rarely made. You are not filling in a form. You are replacing a proxy.
It also sets the limit of the value chain cap in a useful way. The cap gives a supplier averaging up to 1,000 employees a statutory right to decline information beyond the voluntary standard, and makes contrary contract clauses non-binding. Two qualifications. It arrives through national law, and Member States have until 19 March 2027 to transpose it, so it is not yet a right you can invoke. And even once it is, it does not oblige your customer to leave a blank where your data would have been. Refusing is a right, not a strategy. We go through the difference in which ESG questions you can decline.
Where does the data actually come from?
Four sources cover most of the total for most SMEs.
| Activity | Where the record lives | Scope | What usually goes wrong |
|---|---|---|---|
| Fuel burned in owned vehicles and plant | Fuel cards, telematics, plant hour logs | 1 | Hire vehicles and subcontractor plant get missed |
| Gas, oil and refrigerants on site | Utility invoices, service records | 1 | Refrigerant top-ups are never invoiced as emissions |
| Purchased electricity and heat | Meter readings, supply contracts, certificates | 2 | Only one of the two scope 2 bases is produced |
| Purchased goods and services | Purchase ledger, supplier data where it exists | 3 | Spend proxies used where a supplier figure exists |
Notice that three of the four already exist in a finance system. The first task is extraction, not measurement, and the effort is in the joins rather than the sums.
How do you keep the figure comparable next year?
By freezing the method, not the answer.
A single year is a data point. A series is evidence. The series only survives if the boundary, the activity definitions and the factor set stay stable, or if every change is documented and the prior year is restated on the new basis and kept alongside the original.
This is where tooling earns its keep, and it is worth being specific about what to demand. Ask any vendor what happens when an emission factor updates, and whether you can see which factor version produced a given entry. That is a fair question because it is one our own customers have asked us: a mid-market reviewer wrote on G2 in July 2026 that they wanted to see the applied conversion factor and the distance calculator behind an entry, rather than only the resulting figure. If you are still choosing, how to choose carbon accounting software as an SME covers the rest of the checklist.
What should you check before the number leaves the building?
Five lines at the top of the disclosure, and one test.
State the reporting period. State the entities and sites. State the standard and factor set. Give scope 1, both scope 2 figures, and every scope 3 category you covered, naming the ones you did not. Then hand it to a colleague who did not build it and ask them to trace one number back to a source record. If they can, it is finished.
If you want the calculation done properly once so the repeat is cheap, that is carbon footprint consulting, or book a call and bring the questionnaire you were sent.
Sources: Commission Recommendation (EU) 2025/1710, Delegated Regulation (EU) 2023/2772 (ESRS 1 and ESRS E1), Directive (EU) 2026/470, verified against the Official Journal text on 28 August 2026. Hedgehog on G2, verified 27 August 2026.
Facts on this page were last verified on 2026-08-27.
