- In 2026, VSME remains 100% voluntary: no regulatory obligation requires companies to adopt it. It is open to companies with 1,000 employees or fewer that are not subject to CSRD.
- It is mainly adopted by SMEs requested by buyers subject to CSRD, or wanting to structure their ESG approach.
- The Basic module holds around forty datapoints across 11 disclosures (B1 to B11), compared to several hundred under the ESRS.
- No certification or external audit is required: companies freely choose their reference year and publication format.
What is VSME and why does it matter for SMEs?
The VSME (Voluntary Sustainability Reporting Standard for SMEs) is a voluntary reporting framework developed by EFRAG to help companies with 1,000 employees or fewer structure and communicate their ESG practices. Since September 24, 2026, it has been set out in Delegated Regulation (EU) 2026/1560 under the name VS (formerly VSME). It offers a proportionate approach scaled to their resources, built around around forty datapoints across 11 disclosures (B1 to B11) covering environment, social and governance topics.
Its purposes are multiple: strengthening credibility with investors, responding effectively to CSR requests from clients subject to CSRD, building a realistic internal roadmap and improving business transparency.
Is VSME mandatory or voluntary in 2026?
In 2026, VSME remains 100% voluntary. No regulatory obligation requires companies to use it. The only threshold is a ceiling: the VS is open to companies with 1,000 employees or fewer that are not subject to CSRD. Companies with 10 employees or fewer can leave out the more complex environmental data, as explained in our article on VS rules for micro-companies.
Companies freely choose their reference year, publication format and reporting frequency. No certification or external audit is required.
This flexibility explains its growing success among SMEs that want to structure their ESG approach while keeping the administrative burden manageable.
Double materiality, while not mandatory, is strongly recommended to give meaning to action priorities.
The Guide to Successful Environmental Reporting
Methodology, key indicators and best practices for structuring your ESG reporting — applicable to VSME, EcoVadis and CSRD.
Which companies are concerned by VSME in 2026?
In 2026, no company is legally required to apply VSME. Since September 24, 2026, the standard has a legal basis: Delegated Regulation (EU) 2026/1560 replaced the 2025 Commission recommendation and renamed the standard VS. Using it remains voluntary. Our article on what changes with the VS lists the changes. Several categories of companies are directly or indirectly encouraged to use it.
SMEs and mid-sized companies with 1,000 employees or fewer
VSME allows them to formalise a solid ESG strategy without the constraints of CSRD reporting. It is a lever for internal professionalisation and structuring.
Suppliers and subcontractors of large groups
Companies subject to CSRD must collect ESG data throughout their value chain. VSME gives suppliers a standardised format to respond effectively to these requests.
For financial years starting on or after January 1, 2027, a CSRD client cannot require from a supplier with 1,000 employees or fewer more information than Annex II of the VS lists. The supplier can refuse questions beyond this value chain cap, and the client must flag them. The cap only applies to requests made for CSRD reporting.
Growing companies and startups
Early adoption of VSME builds a reliable and usable ESG data foundation from the outset, ready for the requests of clients and investors.
Exporting SMEs and subsidiaries
The European VSME framework makes ESG communication easier across multiple jurisdictions. It helps boost credibility with international partners and financiers.
VSME, CSRD and ESRS: what are the differences?
VSME builds on the work of EFRAG — also behind the ESRS — but is designed for companies with 1,000 employees or fewer that are not subject to CSRD. It covers the same themes, in a simplified and voluntary format. Our article on the differences between VSME and CSRD covers the use cases for each type of SME in detail.
| Criterion | CSRD / ESRS | VSME |
|---|---|---|
| Nature | Mandatory directive | Voluntary framework |
| Scope | More than 1,000 employees and more than €450M net turnover | 1,000 employees or fewer, not subject to CSRD |
| Number of datapoints | Several hundred (mandatory datapoints cut by more than 60% in the revised ESRS) | Around forty in the Basic Module (B1 to B11) |
| External audit | Mandatory | Not required |
| Double materiality | Mandatory | Recommended |
CSRD imposes a formal, audited framework, while VSME leaves room for proportionality and a learning-by-doing approach. Adopting it in 2026 means getting ahead of the sustainability curve without overloading your teams.
Double Materiality for CSRD: Context and Stakeholders
Understand double materiality, identify your stakeholders and frame your impact analysis — a practical guide for approaching CSRD and VSME with method.
Why get started in 2026 with VSME?
Even as a voluntary framework, VSME delivers several strategic advantages:
- Standardised responses to CSR questionnaires from CSRD clients.
- Administrative time savings, thanks to a single indicator grid.
- Stronger credibility with investors and financial partners.
- The ability to steer your ESG strategy with consistency and momentum.
Platforms like Ditto make implementation even smoother by centralising policies, evidence and action plans, while automating data collection from existing sources such as EcoVadis. For SMEs looking to go further, a VSME template is available to structure the report from day one.
Structure your VSME reporting with Ditto
Our experts help you collect your indicators, structure your report and meet the expectations of your buyers and supply chain partners.
VSME: Mandatory or Voluntary? — Key Takeaways
| Key element | Summary |
|---|---|
| VSME status in 2026 | Voluntary, set out in Delegated Regulation (EU) 2026/1560 since September 24, 2026 |
| Companies concerned | Companies with 1,000 employees or fewer: suppliers, startups, exporters |
| Audit and format | No audit required, free format |
| Double materiality | Recommended but not mandatory |
| Main benefit | Responding to ESG requests from CSRD clients and building credibility |
| Link to CSRD / ESRS | Voluntary, simplified framework derived from CSRD standards |
| Advantage for SMEs | Anticipate ESG expectations with proportionate, pragmatic reporting |
