Voluntary SME Standard (VSME)

CoPLIANCE prepares a sustainability report in accordance with the EU standard for companies that do not fall within the scope of the CSRD Directive.

Brief introduction

The VSME standard for SMEs

In January 2024, the EU published a first draft of the "Voluntary SME Standard" (VSME) to help small and medium-sized enterprises (SMEs) simplify the documentation of their sustainability goals and projects. This initiative aims to support SMEs in overcoming the challenges of sustainability reporting and to reduce the burden on them.

BASICS

What is the VSME standard?

Although small and medium-sized enterprises (SMEs) are not legally obliged to prepare sustainability reports, they are often asked to do so by business partners and customers. These requirements can vary greatly and represent an additional burden for SMEs. In order to reduce this burden, the EU Commission has commissioned the European Financial Reporting Advisory Group (EFRAG) to develop the "Voluntary SME Standard" (VSME). The VSME is intended to support SMEs in documenting their sustainability goals and offer a voluntary alternative to the individual questionnaires that SMEs often receive from reporting companies. The first draft was published on January 22, 2024. The aim is to create a uniform standard for sustainability reporting that is accepted by business partners.

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Significance AND ADVANTAGES

The advantages of the VSME standard

Implementing the VSME standard offers companies several advantages:

  1. Increased transparency of sustainability efforts, which can lead to greater confidence building among stakeholders.

  2. Reduced administrative effort in sustainability reporting, which results in increased efficiency.

  3. More efficient communication of sustainability goals and projects, which improves internal and external perception.

  4. Time and resource savings, as less effort is required to adapt to different reporting requirements.

  5. Strengthening the corporate image, which can have a positive impact on brand perception.

  6. Promoting long-term business success through sustainable practices and improving competitiveness.

These benefits illustrate how the VSME standard not only supports companies in their sustainability efforts, but also promotes business efficiency.

Modules and possible applications

How is the VSME structured?

The VSME draft offers three modules that enable companies to document sustainability information on various aspects: the Basic Module, the Actions and Targets (PAT) Module and the Business Partner Module.


Basic module

The basic module of the VSME draft is aimed at micro-entities in accordance with the Accounting Directive and comprises the minimum requirements. A materiality analysis is not required. It contains around 30 data points, requiring information on module applications, consolidation levels, naming of subsidiaries and specific practices for a more sustainable economy.

PAT module

The Narrative Policies, Actions and Targets (PAT) module extends the basic module and is aimed at companies that have already defined formal corporate policies, actions and targets in the area of sustainability. A materiality analysis in accordance with the VSME draft standard is required to ensure the disclosure of material sustainability information.

Business Partner Module

The business partner module (BP module) can be used in conjunction with the basic module or with the basic and PAT modules. It contains additional data that goes beyond the disclosures in B 1 to B 12 and is required by lenders, investors and business partners of the company.

Voluntary VSME report variants

Choose either the basic module alone or in combination with the PAT module, the Business Partner module or both.

Variant 1: Basic module only

Variant 2: Basic module + PAT module

Variant 3: Basic module + Business Partner module

Variant 4: All three modules together

Details

The basic module

Your first sustainability report according to EU guidelines! Specially designed for SMEs and ideal for taking a meaningful step towards sustainability.
According to the draft VSME standard, the basic module is specially designed for micro-enterprises in accordance with the Accounting Directive and has the most minimal requirements. An analysis of materiality is not required.

 

01

B1 - Basis for the preparation

  • Indication of which modules (Basic, PAT, BP) are disclosed

02

B2 - Practices for the transition

  • Brief description of specific practices to achieve sustainability goals (no donations)

  • Can be excluded if the PAT module is disclosed

03

B3 - Energy and greenhouse gas emissions

  • Reporting energy consumption and emissions in CO2 equivalents

04

B4 - Pollution of air, water and soil

  • Indication of pollutants with quantities

  • Indication of whether reporting is in accordance with EMAS

05

B5 - Biodiversity

  • Disclosure of impacts on biodiversity, ecosystems and land use

06

B6 - Water

  • Determining the amount of water withdrawn from the system

  • Companies in areas with high water pollution must report in particular

07

B7 - Resource use, circular economy and waste

  • Disclosure of resource management and the application of circular economy concepts

  • When manufacturer, packaging and design must be disclosed

08

B8 - Labor force - General characteristics

  • Information on type of employment, gender and country

09

B9 - Workforce - Health and safety

  • Disclosure of work-related accidents

  • Disclosure of work-related illnesses and fatalities

10

B10 - Labor force - remuneration, collective bargaining and training

  • Disclosure of starting salaries compared to minimum wages

  • If >150 employees, gender pay gap

  • Disclosure of employees covered by collective bargaining agreements

  • Disclosure of training efforts within the company

11

B11 - Workers in the value chain, affected communities, consumers and end users

  • Disclosure of severe negative impacts on any of these groups

  • Disclosure of plans to mitigate negative impacts, if any

12

B12 - Convictions and fines for corruption or bribery

  • Indication of the number of convictions during the reporting period an

  • Indication of the amount of fines

CoPLIANCE - Our customers

We have already successfully supported a large number of companies in successfully implementing the VSME standard. Our partnerships have enabled these companies to clearly define, implement and transparently communicate their sustainability goals.

The VSME standards (Voluntary ESRS for SMEs) are voluntary EU standards for sustainability reporting by small and medium-sized enterprises (SMEs) that do not fall under the scope of the CSRD.

The VSME aims to support small and medium-sized enterprises (SMEs) in documenting their sustainability goals and projects. The initiative aims to support SMEs in overcoming the challenges of voluntary sustainability reporting and to ease the burden on them.

The voluntary standards provide an adapted framework for sustainability reporting that is tailored to the specific capacities and needs of SMEs. They include basic requirements for reporting on environmental, social and governance aspects, but are simpler and less extensive than the full CSRD requirements.

Participation in the voluntary standards offers SMEs numerous advantages. It enables companies to make their sustainability efforts visible and thus strengthen the trust of customers, investors and other stakeholders. In addition, reporting can help raise awareness and understanding of the importance of sustainable business practices while identifying potential efficiency gains and cost savings.

CONTACT

Your first step towards compliance

Find out how CoPLIANCE can support your company in implementing ESG guidelines. Contact our sales team for customized compliance solutions.