The European Commission adopted on 30 July 2025 a recommendation introducing a voluntary sustainability reporting standard for small and medium-sized enterprises (SMEs), known as the Voluntary Standard for SMEs (VSME).
The VSME has been developed by EFRAG and is available in three language versions: English, French and German.
This standard aims to help SMEs respond to sustainability information requests from financial intermediaries and undertakings subject to mandatory reporting under the Corporate Sustainability Reporting Directive and which have SMEs in their value chains.
Accordingly, the Commission recommends that non-listed SMEs and micro-undertakings wishing to voluntarily report sustainability information do so in accordance with the VSME set out in Annex I to the recommendation. Undertakings applying the standard set out in Annex I to report sustainability information voluntarily may also use the practical guidance included in Annex II.
The Commission recommends that undertakings subject to CSRD for the purposes of sustainability reporting (point 4 of the recommendation) as well as financial institutions, financial market participants, insurance undertakings and credit institutions (point 5 of the recommendation) where they need sustainability information from SMEs, should limit as far as possible their requests for such information to the information provided pursuant to the voluntary sustainability reporting standard set out in Annex I to the recommendation.
The VSME is intended as an interim solution until a delegated act on a voluntary standard is formally adopted. The content of the delegated act may differ from today's recommendation, and its adoption will depend on the outcome of negotiations between the co-legislators on the Omnibus I proposal (for additional details please see our previous newsflash).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
