VSME Reporting: How to Structure Your ESG Report Simply

Understanding the VSME standard

The VSME is a voluntary framework developed by EFRAG to help companies with 1,000 employees or fewer structure their ESG communication. Since September 24, 2026, it has been set out in Delegated Regulation (EU) 2026/1560 under the name VS (formerly VSME); our article on what changes with the VS lists the changes. Its Basic Module holds around forty datapoints across 11 disclosures (B1 to B11) covering environment, social and governance — following the same logic as the European ESRS standards, but in a far more proportionate form.

Its main purposes are pragmatic: strengthen ESG credibility with banks and investors, respond effectively to CSR requests from large CSRD-subject clients, structure a clear internal approach, and demonstrate transparency without mandatory audit or format.

VSME, CSRD and ESRS: how they fit together

CSRD sets legal reporting obligations for companies with more than 1,000 employees and more than €450M net turnover. ESRS defines the technical content. VSME translates that spirit to an SME-appropriate scale. Our article on differences between VSME and CSRD details the use cases for each company profile.

Step 1: scope the approach and define the perimeter

Effective VSME reporting starts with choosing the right module:

• Basic: around forty datapoints across 11 disclosures (B1 to B11).
• Comprehensive: adds 9 disclosures (C1 to C9) for a more complete view.

Headcount matters too. The VS is open to companies with 1,000 employees or fewer, and those with 10 employees or fewer can leave out the more complex environmental data: B3 (energy and GHG emissions), B6 (water) and B7 (waste and circularity). Our article on optional data for micro-companies details the rule.

Also define your organisational scope (entity, subsidiaries, sites) and reference period. The standard sets no formal constraints: you can start with an ongoing year and adjust in subsequent years.

Step 2: conduct a double materiality analysis

Even though it is not mandatory, the double materiality analysis is the cornerstone of a relevant ESG report. It combines two perspectives:

• Impact: how your activity influences the planet and society.
• Risk/opportunity: how ESG issues affect your performance.

This analysis guides topic prioritisation and turns reporting into a strategic tool rather than a compliance exercise.

Step 3: collect data and structure the report

The data to gather depends on the chosen module. The Basic module covers:

• Environment: energy consumption, emissions, waste management.
• Social: headcount, diversity, health and safety, training.
• Governance: ethics, responsible procurement policy, CSR management.

Collection draws on existing data (energy invoices, HR records, quality indicators), centralised in an internal tool or ESG management platform. The EFRAG Excel template simplifies structuring and data consistency.

Step 4: validate information and prepare the report

VSME imposes no mandatory external audit. Validation relies on internal processes: source documentation (invoices, HR records), cross-checking between operational teams and management, and a final review for consistency.

External consultants or platforms like Ditto simplify these steps through automation, data pre-filling and human ESG coaching support.

Step 5: communicate and create value

The VSME report is primarily designed to demonstrate your transparency and improve relationships with partners. It can be shared with large corporate clients, financial partners or integrated into evaluation platforms like EcoVadis.

For exporting or industrial SMEs, VSME provides a single, standardised response to multiple client questionnaires, while projecting a clear, credible sustainability positioning.

Best practices for efficient VSME reporting

• Involve leadership from the outset: without buy-in, the approach runs out of steam.
• Start simple: a well-completed Basic module is worth more than an incomplete comprehensive one.
• Reuse existing data (HR, finance, environment).
• Build internal capability: train an internal lead or rely on a dedicated coach.
• Automate collection and reporting via a platform like Ditto to limit duplicates and manual errors.

VSME Reporting — Key Takeaways