From VSME to VS: what changes

The new European Voluntary Standard.

Five steps to understand the VS

1. From VSME to VS
2. Scope and objectives of the VS
3. The two modules
4. Value chain cap, support and tools
5. What changes compared with the VSME

From VSME to VS

Key dates

• January 2024 – CSRD Directive. Large companies must report ESG data and collect it across their entire value chain. Your SME clients are directly impacted.
• Consequence – Market Pressure. Banks, investors, insurers and major buyers increasingly require structured ESG proof for financing, contracts and partnerships.
• November 2024 – VSME Standard. EFRAG developed the VSME standard as a proportionate, voluntary ESG reporting framework designed specifically for SMEs.
• February 2025 – Omnibus I. The scope of the CSRD is drastically reduced.* The number of companies mandatorily subject to the CSRD is reduced from 50,000 to approximately 5,000 in Europe.
• July 2026 – VS, Delegated Act. After Omnibus I, the Commission adopts the Voluntary Standard.

*The CSRD applies to companies with more than 1,000 employees and over 450 million euros in net turnover (with the total balance sheet criterion being removed entirely). At the same time, the due diligence component (CSDDD) is refocused exclusively on very large companies with more than 5,000 employees and 1.5 billion euros in turnover.

Scope and objectives of the VS

A Wider Scope: from 250 to 1,000 Employees

250 → 1,000. EFRAG specifies that the VSME was originally designed for companies with fewer than 250 employees, whereas the VS targets a wider scope, up to 1,000 employees.

€450M. Net annual turnover: the financial threshold the directive sets for mandatory reporting, together with the 1,000-employee criterion.

If the company has fewer than 1,000 employees or a net turnover of less than 450 million, it reports according to the VS.

The VS: Who Is It For and What For?

• Who for: Companies with less than 1,000 employees and less than €450M net annual turnover
• What for – Answer data requests: From companies subject to the CSRD, banks and investors. Ease access to finance and better manage your sustainability issues.
• Key role – Value chain cap: Protected undertakings cannot be asked for more than the mandatory datapoints.

Commission Delegated Regulation (EU) 2026/1560, supplementing Directive 2013/34/EU (Annex I, para. 1–2 and Article 3).

The two modules

The Basic Module is the entry point. The Comprehensive Module builds on it.

11 Basic Module disclosures · B1 to B11

• Entry point, in plain language
• Target for micro-undertakings, minimum for others
• Simplified narrative information and ESG metrics

9 Comprehensive Module disclosures · C1 to C9

• Information requested by banks, investors and customers
• Requires applying the Basic Module as well
• Metrics drawn from SFDR (PAI), EBA Pillar 3 and the Benchmark Regulation

Key principle: No materiality assessment is required. Datapoints are mandatory, "if applicable", voluntary or sector-specific. Policies and targets: a statement in B2, a brief description in C2.

Basic Module: 11 Disclosures

The information every company using the VS reports.

Outside the scope of the value-chain cap for undertakings with 10 employees or less: B3, B6 and B7.

Comprehensive Module: 9 Disclosures

The additional information expected by banks, investors and customers.

Outside the scope of the value-chain cap for undertakings with 10 employees or less: C1, C3, C4, C6 and C7.

Value chain cap, support and tools

The Value Chain Cap

The main protection the VS gives companies.

The principle. A company subject to the CSRD cannot require its partners with fewer than 1,000 employees and an annual turnover below €450 million to provide more than the mandatory datapoints of the VS.

Any request beyond the cap must flag the extra information sought and the right to decline.

The datapoints covered are listed in Annex II, with a lower cap for undertakings with 10 employees or less.

Note: the cap applies only to information gathered for CSRD reporting, from financial years starting on or after 1 January 2027.

What changes compared with the VSME

What Changes (1/2): Scope and Framework

Commission Delegated Act (2013/34/UE) compared with Commission Recommendation (EU) 2025/1710.

• Wider scope. From unlisted SMEs to all companies with up to 1,000 employees.
• Guidance moved out. The guidance annex disappears. EFRAG guidance is on the Knowledge Hub: English now, 19 EU languages by end 2026.
• New Annex II for the value chain cap. List of the data covered, separate for 10 employees or fewer and more than 10.
• EMAS and VS combined. A single report can cover both frameworks.
• Wider omissions. Aligned with the simplified ESRS, no longer only classified or sensitive information.
• Simpler topic list. Appendix B follows the simplified ESRS 1, without sub-sub-topics.

What Changes (2/2): Metrics

Few changes of substance: some metrics removed, aligned or moved.

• New exemption: 10 employees or fewer. Certain datapoints in B3, B6, B7, C1, C3, C4, C6 and C7 become voluntary.
• Data removed. GHG intensity (B3), land use (B5), Paris-aligned benchmarks (C8).
• Data aligned with the simplified ESRS. Biodiversity (B5), water (B6), waste (B7), fatalities (B9), training (B10).
• Employee turnover. Moves from B8 to C5. The 50-employee threshold disappears for turnover, the gender ratio and self-employed workers.

Commission Delegated Act (2013/34/UE) compared with Commission Recommendation (EU) 2025/1710.

Key Takeaways

Three things to remember about the VS.

1. The VS replaces the VSME as the single Voluntary Standard, for all companies with up to 1,000 employees or up to €450 million in annual turnover.
2. It protects these companies: companies subject to the CSRD cannot ask them for more than the VS mandatory datapoints
3. The content stays close to the VSME: a few metrics removed or aligned, and relief for companies with 10 employees or fewer.

Questions about the VS? Write to us at hello@vsme-medals.eu