The European Financial Reporting Advisory Group (EFRAG) has announced the delivery of its technical advice on the Voluntary Standard for Micro-, Small-, and Medium-Sized Enterprises (VSME). This initiative, requested by the European Commission and confirmed on December 12, 2024, aims to support non-listed SMEs in streamlining sustainability reporting and accessing green finance.
The VSME was developed following a public consultation held from January 22 to May 21, 2024, which gathered feedback from diverse stakeholders, including SMEs, banks, accountants, and industry associations. Responding to this input, EFRAG simplified the draft standard, culminating in its approval by the EFRAG SRB on November 13, 2024, and the EFRAG SR TEG on October 22, 2024.
The VSME is designed for undertakings outside the scope of the Corporate Sustainability Reporting Directive (CSRD). It aligns with the European Commission’s 2023 SME Relief Package, which emphasised the need for standardised sustainability reporting to facilitate SMEs’ access to green financing and support the transition to a sustainable economy.
The standard features two modules: a Basic Module and a Comprehensive Module. These modules aim to address the majority of sustainability data requests from business partners, such as banks and large corporations. The VSME offers a standardised approach to replace the current reliance on diverse and uncoordinated questionnaires and ESG data requests. While the VSME applies broadly across sectors, additional data requests may be introduced for sector-specific requirements.
EFRAG plans to enhance the VSME’s adoption by launching digital tools, educational materials, and outreach initiatives in 2025. These efforts will include support guides, awareness campaigns, and the monitoring of emerging platforms to ensure broad market acceptance and practical implementation by SMEs.
Patrick de Cambourg, EFRAG SRB Chair said, “The issuance of the VSME confirms EFRAG’s commitment to contribute to a more sustainable economy. VSME is designed to support the availability of simple but relevant sustainability-related data. It aims at reducing the burden for SMEs currently confronted with multiple uncoordinated data requests and, when supported by the appropriate online platforms and tools, will offer new business and financing opportunities as well as additional management insight to the reporting companies.”
Chiara Del Prete, EFRAG SR TEG Chair added, “The development of VSME has been a very enriching experience. We received strong support from all the stakeholder categories along all the steps of our due process. I am grateful to all those that contributed and I am looking forward to continuing to support SMEs with practical guides, promoting synergies between the various initiatives that are developed and contribute to the emergence of a robust SME ecosystem.”
