VSME is the EU's voluntary sustainability reporting standard for non-listed SMEs, developed by EFRAG under a European Commission mandate. It does two things: it gives smaller companies a single format for reporting sustainability data, and it sets a cap on how much sustainability information large CSRD-reporting companies may demand from SME suppliers in their value chain.
That second function is why it matters commercially, and it is the part most coverage underplays.
Why this exists now
Two things happened in parallel.
The 2025 Omnibus package narrowed CSRD scope substantially, to companies above 1,000 employees and €450 million turnover, with the revised scope applying to financial years beginning on or after 1 January 2027. A large number of mid-sized companies that had been preparing for CSRD fell out of scope entirely.
At the same time, the companies still in scope have to report on their value chains. Which means they ask their suppliers. And those suppliers are mostly SMEs with no reporting obligation of their own, receiving a different bespoke questionnaire from every large customer.
VSME is the answer to that second problem. One standard, one report, reusable across customers.
The value chain cap
This is the provision worth understanding properly.
VSME establishes a cap on the sustainability information that CSRD-reporting companies may require from SMEs in their upstream and downstream value chain. In practice: a large customer cannot demand unlimited bespoke data from a small supplier. The standard defines what is reasonable to ask.
For an SME receiving supplier questionnaires, this changes the conversation. Instead of answering whatever arrives in whatever format, you can report once to VSME and point customers to it. Requests that go beyond the cap are requests you have a defensible basis to decline.
We cover which requests fall outside the cap in a separate article on refusing ESG questions.
Who should care
SMEs supplying large corporates. If your customers are above the revised CSRD thresholds, they need value chain data and they will ask you. This is commercial pressure rather than legal obligation, but commercial pressure from a major customer is not optional in practice.
Companies that fell out of CSRD scope. If you spent 2024 and 2025 preparing for CSRD and the Omnibus took you out of scope, VSME is where that preparation still pays. The work is not wasted; the destination changed.
Companies wanting one answer instead of ten. If you currently field EcoVadis assessments, customer questionnaires and ad hoc data requests separately, consolidating onto VSME reduces the annual overhead considerably.
Companies bidding for work where sustainability is scored. A VSME report is a credible, recognised artefact to put in front of a buyer.
What VSME covers
The standard is modular, which is the point: an SME reports the basic module, and adds further modules where relevant or where customers need more.
The basic layer covers general information about the business, plus environmental, social and governance disclosures scaled to what a smaller company can reasonably produce. Environmental disclosures include energy and greenhouse gas emissions, pollution, water, biodiversity and waste. Social disclosures cover workforce characteristics, health and safety, and related matters. Governance covers business conduct.
The comprehensive layer adds disclosures aimed at the data that banks, investors and large corporate customers most often request beyond the basics.
For most SMEs, the greenhouse gas disclosure is the one requiring genuine work, because it needs an actual calculation rather than a policy statement.
Timing
The revised CSRD scope applies for financial years beginning on or after 1 January 2027, with the second wave of companies that remain in scope reporting in 2028 on 2027 data.
For SME suppliers, that means the questions intensify through 2027 as in-scope customers assemble value chain data for their first reports under the revised thresholds. The practical window to have a VSME report ready is during 2027, not when the request arrives.
There is a seasonal pattern worth noting: supplier questionnaires cluster in the first quarter, after large companies publish annual reports and start collecting for the next cycle.
VSME and the CO2-Prestatieladder
For Dutch companies, these two often get confused. They serve different purposes and are not substitutes.
The CO2-Prestatieladder is a certification scheme that delivers a tender advantage in Dutch procurement. VSME is a reporting standard that answers value chain data requests. A company bidding on Rijkswaterstaat or ProRail contracts needs the ladder. A company supplying a large corporate needs VSME. Some need both.
A dedicated comparison of the two is planned as a follow-up.
What the reporting actually requires
The disclosures that need real data, rather than a written policy, are the environmental ones, and the emissions figure above all.
That means a corporate carbon footprint covering at least Scope 1 and 2, and increasingly Scope 3 where customers ask for it. For companies whose customers are pushing on value chain emissions specifically, Scope 3 is where the questions are heading.
The other consideration is repetition. VSME reporting is annual, and the value of a report increases when the year-on-year series is consistent. That is an argument for calculating on a platform that keeps the method stable rather than rebuilding each year.
Where to start
If customers are already asking, start with the emissions calculation, because it has the longest lead time and everything else is faster.
If they are not asking yet but your customers are large, the useful move is finding out which of them remain in CSRD scope under the revised thresholds. That tells you who will ask, and roughly when.
Talk to us about a VSME report, or book a call.
Sources: EFRAG VSME standard, European Commission Omnibus I package, Directive (EU) 2022/2464 as amended.
