VSME for Exporting SMEs: Meeting International ESG Requirements

Understanding VSME: a shared language for ESG compliance among exporting SMEs

The VS (formerly VSME) is a voluntary reporting standard, built on EFRAG's work and adopted by the European Commission as Delegated Regulation (EU) 2026/1560. It is open to any company with 1,000 employees or fewer that is not subject to CSRD. It simplifies ESG communication through a proportionate approach built around around forty datapoints in the Basic Module, across 11 disclosures (B1 to B11), consistent with European standards (ESRS).

For an exporting SME, VSME is a strategic tool: it anticipates the environmental and social requirements that international clients — often subject to CSRD — must themselves meet. VSME acts as a European ESG passport, structuring CSR data in a format recognised across the market, strengthening credibility with foreign banks, investors and buyers.

Voluntary but strategic: why VSME matters from 2026

VSME remains voluntary: no company is required to publish a VS report. Since 24 September 2026, the standard has applied as a delegated regulation, open to companies with 1,000 employees or fewer, and companies with 10 employees or fewer can leave out the more complex environmental data. For exporters, this flexibility becomes a competitive advantage. Large companies must now trace their full value chain to comply with CSRD — which means requiring standardised ESG information from their SME suppliers. VSME offers a single, recognised response format, eliminating multiple client questionnaires and standardising international communication.

The VS also sets a limit on those requests. From financial years starting on or after 1 January 2027, a CSRD-subject client cannot require from a supplier with 1,000 employees or fewer information beyond Annex II of the VS, and the supplier can refuse questions that go further. This value chain cap also protects suppliers established outside the EU, which matters for exporters selling to European groups. It only covers requests made for CSRD reporting: questions linked to EUDR, the forced labour regulation, other laws, contracts made for other purposes, or voluntary assessments such as EcoVadis or CDP remain outside it.

Alignment with CSRD and ESRS: simplified but compatible

VSME applies the same principles as ESRS but in a lighter form. Our article on differences between VSME and CSRD details the practical use cases for each company profile.

How an exporting SME can implement VSME

1. Diagnosis and prioritisation

Identify the most relevant ESG topics based on materiality: energy, carbon emissions (Scopes 1 to 3), workplace safety, governance, diversity. This exercise guides indicator selection across the Basic Module (B1 to B11) and the Comprehensive Module (C1 to C9).

2. Data collection and structuring

Use the EFRAG Excel template or a digital platform like Ditto, which automates collection and pre-fills responses from existing data (carbon footprints, EcoVadis audits). This centralisation ensures traceability and reduces administrative burden.

3. Report production and distribution

The VSME report can be integrated into existing CSR communication or published independently. No external audit is required — the priority is transparency and clarity for international partners.

Integrating VSME into a sustainable export strategy

VSME helps SMEs demonstrate ESG reliability in foreign tenders, particularly when clients impose sustainability requirements equivalent to CSRD or other frameworks (GRI, ISO, TCFD). Early adoption enables SMEs to secure access to new markets, strengthen commercial differentiation, improve access to finance and answer the value-chain requests of CSRD-subject clients.

VSME for Exporting SMEs — Key Takeaways