VSME

EFRAG, the body that writes the EU’s sustainability reporting standards, developed the VSME so that smaller companies outside mandatory EU reporting have one consistent format instead of answering dozens of different questionnaires. The European Commission adopted it as a recommendation in July 2025. Details are on EFRAG’s SME page.

What it means for a small business

The VSME has two parts:

• Basic Module (B1 to B11). The core disclosures every SME using VSME reports: basis of preparation, practices and policies, energy and greenhouse gas emissions, pollution, biodiversity, water, resource use and waste, workforce headcount and characteristics, health and safety, pay and training, and convictions or fines for corruption and bribery.
• Comprehensive Module. Extra disclosures for businesses whose banks, investors or customers want more detail.

It is voluntary and aimed at companies with fewer than 250 employees. For a UK business, it matters mainly if you sell to EU companies. Under the EU’s 2026 Omnibus changes, large EU reporters cannot demand more from value-chain partners with 1,000 employees or fewer than the VSME defines, so the VSME effectively caps what an EU customer can ask you for.

An example

A UK packaging supplier with 30 staff sells to a German manufacturer. The customer asks for sustainability data. Rather than a bespoke questionnaire, the supplier provides its figures in VSME Basic Module format: energy use, Scope 1 and Scope 2 emissions, waste, headcount, health and safety and training.

How ESG Now handles it

ESG Now is not a VSME report, but it collects much of the same data: energy, emissions, waste and water, workforce, health and safety, training and policies. That gives you most of the figures you need for the Basic Module. Read our guide to the VSME for UK SMEs, or see how ESG Now helps with supplier questionnaires.