What is the Voluntary Sustainability Reporting Standard (VS)? The voluntary EU standard for SMEs (formerly VSME)

VS gives small and medium-sized enterprises a simple, structured way to get started with their sustainability data, without getting bogged down in all the details that large companies have to deal with.

VSME was developed by EFRAG and started out as a recommendation from the European Commission [3]. The Commission has now turned it into VS and adopted it as an EU regulation, which has applied since 24 September 2026 [1][8]. Using the standard is still voluntary. The regulation makes it the EU's official standard and sets the limit on what large companies can ask of their suppliers for CSRD purposes (more on that below).

VS is largely the same standard as VSME. The few changes are there to align it with the new, simplified ESRS, the standards that large companies report under [3]. So if you've already reported under VSME, you can use that material as it is.

Why VS matters right now

The EU's Omnibus package has redrawn the map for sustainability reporting. First, the reporting requirements for CSRD waves 2 and 3 were postponed by two years through the so-called Stop-the-Clock Directive in April 2025 [4]. Then the thresholds were raised. The final Omnibus Directive was published in February 2026, and now only companies with more than 1,000 employees and a net turnover above €450 million are in scope [5]. Listed SMEs were also removed from the requirements [5]. If you want to read more, our article on the Omnibus covers it.

In short, SMEs are no longer covered by CSRD. But the questions about sustainability data don't go away. Customers, larger companies, banks and investors still want to know where their suppliers stand.

This is where VS comes in, now with an important new feature. From financial years starting on 1 January 2027, companies reporting under CSRD may not request more information than VS covers from companies in their value chain with fewer than 1,000 employees [1][3][5][8]. The standard works as a ceiling, known as the value-chain cap. For you as a supplier, it's fairly simple: with a VS report, you have answers to the sustainability questions your CSRD customers can require information on.

Note that this cap only applies to customers' questions related to CSRD. They may still ask for information beyond VS for other purposes, such as procurement.

Create your VS report with GoClimate

What does VS involve?

VS builds on VSME, developed by EFRAG, the same organisation behind the European Sustainability Reporting Standards (ESRS) under CSRD. The European Commission recommended VSME in July 2025 and then adopted VS as a delegated regulation that took effect in September 2026 [2][3]. The standard helps smaller companies focus on what's relevant to their own business, without drowning in detail.

With VS, you can:

• Show responsibility and transparency
• Work systematically on sustainability issues
• Meet requirements from customers, investors and other stakeholders
• Collect and use sustainability data in a way that strengthens your business

This means that even smaller companies can build a solid foundation for both decisions and communication.

The benefits of reporting under VS

No law requires it, but there are still good reasons to produce a VS report:

• You meet the requirements of large customers and the rest of the value chain
• You build trust with investors, customers and banks
• You get a clear structure for your sustainability work
• You answer customers' questions once, in a format they recognise
• You can communicate your sustainability data easily

For many SMEs, VS becomes a first step towards more structured sustainability work, on their own terms and at their own pace.

How the voluntary EU standard VS is structured

The standard consists of two modules [1][8]:

• Basic Module: a simple, quick start for companies that want to get going
• Comprehensive Module: more detailed reporting for companies with higher ambitions

Unlike ESRS, VS doesn't require a double materiality assessment [6][7]. That keeps reporting manageable even for small companies, while still giving you a clear picture of your impacts, risks and opportunities.

From VSME to VS

VS builds on VSME, the voluntary standard EFRAG developed for SMEs. Only a few adjustments were made when VSME became VS:

• Three questions have been removed
• One question has moved from the Basic Module to the Comprehensive Module
• Three questions now apply only to certain companies

So if you've already reported under VSME, most of it will look familiar. The structure and most of the questions are the same, and for many companies there are even slightly fewer questions to answer.

Summary

Reporting under VS isn't just a way to meet expectations. It's a smart investment in your business. For SMEs, VS is a simple way to start working with sustainability data in a structured way, build trust and be ready when customers ask. And thanks to the value-chain cap, you also know where the limit is.

Get started with VS today – Try GoClimate's VS tool