VSME — Standard

Commission Recommendation (EU) 2025/1710 · English

This is an unofficial rendering of the text. For the official version, see EUR-Lex.

General

Objective of this Standard and to which undertakings it applies

The objective of this voluntary Standard is to support micro-, small- and medium-sized undertakings in:

providing information that will help satisfy the data needs of large undertakings requesting sustainability information from their suppliers;

providing information that will help satisfy data needs from banks and investors, therefore helping undertakings in their access to finance;

improving the management of the sustainability issues they face, i.e. environmental and social challenges such as pollution, workforce health and safety. This will support their competitive growth and enhance their resilience in the short-, medium- and long-term; and

contributing to a more sustainable and inclusive economy.

This Standard is voluntary. It applies to undertakings (1) whose securities are not admitted to trading on a regulated market in the European Union (not listed). [Article 3 of Directive 2013/34/EU] defines three categories of small- and medium-sized undertakings based on their balance sheet total, their net turnover and their average number of employees during the financial year.

An undertaking is micro if it does not exceed two of the following thresholds:

€450 000 in balance sheet total;

€900 000 in net turnover; and

an average of 10 employees.

An undertaking is small if it does not exceed two of the following thresholds:

€5 million in balance sheet total;

€10 million in net turnover; and

an average of 50 employees.

An undertaking is medium if it does not exceed two of the following thresholds:

€25 million in balance sheet total;

€50 million in net turnover; and

an average of 250 employees.

These undertakings fall outside the scope of the Corporate Sustainability Reporting Directive (CSRD) but are encouraged to use this Standard. This Standard covers the same sustainability issues as the European Sustainability Reporting Standards (ESRS) for large undertakings. However, it is proportionate and therefore takes into account micro-, small- and medium-sized undertakings’ fundamental characteristics. Micro-undertakings are welcome to use only certain parts of this Standard as highlighted in paragraph 5(a).

Consistency with ESRS for large undertakings has been carefully considered in the preparation of this Standard while defining proportionate requirements. This Standard has no legal authority unlike the ESRS for large undertakings.

Structure of this Standard

This Standard has two modules that the undertaking can use to prepare its sustainability report:Paragraph 24 below illustrates the available options for the preparation of a sustainability report using this Standard by adopting one or more of these modules. Once chosen, a module shall be complied with in its entirety (with flexibility allowed under paragraph 22); however, each item of disclosure shall be provided only when it is applicable to the undertaking’s specific circumstances.

Basic Module: Disclosures B1 and B2 and Basic Metrics (B3 to B11). This module is the target approach for micro-undertakings and constitutes a minimum requirement for other undertakings; and

Comprehensive Module: this module sets datapoints in addition to disclosures B1-B11, which are likely to be requested by banks, investors and corporate clients of the undertaking on top of the Basic Module.

Applying the Basic Module is a prerequisite for applying the Comprehensive Module.

Appendix A Defined terms include the definitions of the terms used in this Standard. Throughout the VSME Standard, the terms defined in the glossary of definitions (Appendix A) are set in bold italics, except when a defined term is used more than once in the same paragraph.

Principles for the preparation of the sustainability report (Basic and Comprehensive Module)

Complying with this Standard

This Standard sets requirements that allow the undertaking to provide relevant information on:

how it has had and is likely to have a positive or negative impact on people or on the environment in the short-, medium- or long-term; and

how environmental and social issues have affected or are likely to affect its financial position, performance and cash flows in the short-, medium- or long-term.

The undertaking shall report information that is relevant, faithful, comparable, understandable and verifiable.

Depending on the type of activities carried out by the undertaking, the inclusion of additional information (metrics and/or narrative disclosures) not covered in this Standard is appropriate in order to disclose sustainability issues that are common in the undertaking’s sector (i.e. typically encountered by businesses or entities operating within a specific industry or field) or that are specific to the undertaking, as this supports the preparation of relevant, faithful, comparable, understandable and verifiable information. This includes the consideration of information on Scope 3 GHG emissions (see paragraphs 50 to 53 of this Standard). Appendix B provides a list of possible sustainability issues.

The undertaking may complement the metrics from the Basic and Comprehensive modules with additional qualitative and/or quantitative information where appropriate in accordance with paragraph 10 above.

Comparative information

The undertaking shall report comparative information in respect of the previous year except for metrics disclosed for the first time. The undertaking shall report comparative information from the second year of reporting.

If applicable principle

Certain disclosures only apply to specific circumstances (2). In particular, the instructions provided in each disclosure specify such circumstances and the information that is to be reported only if considered ‘applicable’ by the undertaking. When one of these disclosures is omitted, it is assumed to not be applicable.

Inclusion of subsidiaries in the reported data

If the undertaking is a parent company of a group, it is recommended that it prepares its sustainability report on a consolidated basis, including information from its subsidiaries.

If the parent undertaking has prepared its sustainability report on a consolidated basis, including information from its subsidiaries, the subsidiary undertakings are exempted from reporting.

Timing and location of the sustainability report

If a sustainability report is prepared to meet the needs of large undertakings or banks that require an update annually, it shall be prepared annually. If the undertaking prepares financial statements, the sustainability report shall be prepared with a period of time that is consistent with the preparation of the financial statement. If specific datapoints did not change from the previous reporting year, the undertaking may indicate that no changes occurred and refer to the information provided for that specific datapoint in the previous year’s report.

The primary function of this report is to inform actual or potential business counterparties. The undertaking may decide to make its sustainability report available to the public. In this case, the undertaking may present its sustainability report in a separate section of the management report if it has one. Otherwise, the undertaking may present its sustainability report as a separate document.

To avoid publishing the same information twice, the undertaking may refer in its sustainability report to disclosures published in other documents that can be accessed at the same time as the sustainability report (3).

Classified and sensitive information

When the provision of the disclosures in this Standard requires disclosing classified or sensitive information, the undertaking may omit such information. If the undertaking decides to omit such information, it shall state that this is the case under disclosure B1 (see paragraph 24).

Coherence and linkages with disclosures in financial statements

If the undertaking also prepares financial statements, the information provided in its sustainability report following this Standard shall:

be coherent with what is reported in the financial statements for the same period; and

be presented in a way that facilitates the understanding of the linkages that exist with the information reported in financial statements, for example by using appropriate cross-references.

Basic Module

The undertaking shall report on its environmental, social and business conduct issues (together ‘sustainability issues’) using the B1 to B11 disclosures below.

If the undertaking wants to provide more comprehensive information, it may also integrate the metrics required from B1 to B11 with disclosures, selecting them from the Comprehensive Module.

Additional guidance on disclosures B1 to B11 is available in paragraphs 1 to 144 of Annex II of this Recommendation.

Basis for preparation

The undertaking shall disclose:

which of the following options it has selected:

OPTION A: Basic Module (only); or

OPTION B: Basic Module and Comprehensive Module;

if the undertaking has omitted a disclosure as it is deemed classified or sensitive information (see paragraph 19), the undertaking shall indicate the disclosure that has omitted.

whether the sustainability report has been prepared on an individual basis (i.e. the report is limited to the undertaking’s information only) or on a consolidated basis (i.e. the report includes information about the undertaking and its subsidiaries);

in case of a consolidated sustainability report, the list of the subsidiaries, including their registered address (4), covered in the report; and

the following information:

the undertaking’s legal form;

NACE sector classification code(s);

size of the balance sheet (total assets in monetary units);

turnover (in monetary units);

number of employees in headcount or full-time equivalents;

country of primary operations and location of significant asset(s); and

geolocation of sites owned, leased or managed.

If the undertaking has obtained any sustainability-related certification or label, it shall provide a brief description of those (including, where relevant, the issuers of the certification or label, date and rating score).

Practices, policies and future initiatives for transitioning towards a more sustainable economy

If the undertaking has put in place specific practices, policies or future initiatives for transitioning towards a more sustainable economy, it shall state so. The undertaking shall state whether it has:

practices. Practices in this context may include, for instance, efforts to reduce the undertaking’s water and electricity consumption, to reduce GHG emissions or to prevent pollution, and initiatives to improve product safety as well as current initiatives to improve working conditions and equal treatment in the workplace, sustainability training for the undertaking’s workforce and partnerships related to sustainability projects;

policies on sustainability issues, whether they are publicly available, and any separate environmental, social or governance policies for addressing sustainability issues;

any future initiatives or forward-looking plans that are being implemented on sustainability issues; and

targets to monitor the implementation of the policies and the progress achieved towards meeting such targets.

Such practices, policies and future initiatives include what the undertaking does to reduce its negative impacts and to enhance its positive impacts on people and the environment, in order to contribute to a more sustainable economy. Appendix B provides a list of possible sustainability issues that could be covered in this disclosure. The undertaking may use the template found in paragraph 14 of Annex II of this Recommendation to report this information.

If the undertaking also reports on the Comprehensive module, it shall complement the information provided under B2 with the datapoints found in C2.

Energy and greenhouse gas emissions

The undertaking shall disclose its total energy consumption in MWh, with a breakdown as per the table below, if it can obtain the necessary information to provide such a breakdown:

	Renewable	Non-renewable	Total
Electricity (as reflected in utility billings)
Fuels

The undertaking shall disclose its estimated gross greenhouse gas (GHG) emissions in tons of CO2 equivalent (tCO2eq) considering the content of the GHG Protocol Corporate Standard (version 2004), including:

the Scope 1 GHG emissions in tCO2eq (from owned or controlled sources); and

the location-based Scope 2 emissions in tCO2eq (i.e. emissions from the generation of purchased energy, such as electricity, heat, steam or cooling).

The undertaking shall disclose its GHG intensity calculated by dividing ‘gross greenhouse gas (GHG) emissions’ disclosed under paragraph 30 by ‘turnover (in monetary units )’ disclosed under paragraph 24(e)(iv) (5).

Pollution of air, water and soil

If the undertaking is already required by law or other national regulations to report to competent authorities its emissions of pollutants, or if it voluntarily reports on them according to an Environmental Management System, it shall disclose the pollutants it emits to air, water and soil in its own operations, with the respective amount for each pollutant. If this information is already publicly available, the undertaking may alternatively refer to the document where it is reported, for example, by providing the relevant URL link or embedding a hyperlink.

Biodiversity

The undertaking shall disclose the number and area (in hectares or m2) of sites that it owns, has leased, or manages in or near a biodiversity sensitive area.

The undertaking may disclose metrics related to land-use (in hectares or m2):

total use of land ;

total sealed area;

total nature-oriented area on-site; and

total nature-oriented area off-site.

Water

The undertaking shall disclose its total water withdrawal, i.e. the amount of water drawn into the boundaries of the organisation (or facility); in addition, the undertaking shall separately present the amount of water withdrawn at sites located in areas of high water-stress.

If the undertaking has production processes in place which significantly consume water (e.g. thermal energy processes like drying or power production, production of goods, agricultural irrigation, etc.), it shall disclose its water consumption calculated as the difference between its water withdrawal and water discharge from its production processes.

Resource use, circular economy and waste management

The undertaking shall disclose whether it applies circular economy principles and, if so, how it applies these principles.

The undertaking shall disclose:

the total annual generation of waste broken down by type (non-hazardous and hazardous);

the total annual waste diverted to recycling or reuse; and

if the undertaking operates in a sector using significant material flows (for example manufacturing, construction, packaging or others), the annual mass-flow of relevant materials used.

Workforce – General characteristics

The undertaking shall disclose the number of employees in headcount or full-time equivalent for the following metrics:

type of employment contract (temporary or permanent);

gender; and

country of the employment contract, if the undertaking operates in more than one country.

If the undertaking employs 50 or more employees, it shall disclose the employee turnover rate for the reporting period.

Workforce – Health and safety

The undertaking shall disclose the following information regarding its employees:

the number and rate of recordable work-related accidents; and

the number of fatalities as a result of work-related injuries and work-related ill health.

B10

Workforce – Remuneration, collective bargaining and training

The undertaking shall disclose:

whether the employees receive pay that is equal or above applicable minimum wage for the country it reports on , determined directly by the national minimum wage law or through a collective bargaining agreement;

the percentage gap in pay between its female and male employees. The undertaking may omit this disclosure when its headcount is below 150 employees noting that this threshold will be reduced to 100 employees from 7 June 2031;

the percentage of employees covered by collective bargaining agreements; and

the average number of annual training hours per employee, broken down by gender.

B11

Convictions and fines for corruption and bribery

In case of convictions and fines in the reporting period, the undertaking shall disclose the number of convictions, and the total amount of fines incurred for the violation of anti-corruption and anti-bribery laws.

Comprehensive Module

This module provides disclosures to address in a comprehensive way the information needs of the undertaking’s business partners, such as investors, banks and corporate clients in addition to the ones included in the Basic Module. The disclosures in this module reflect the financial market participants and corporate clients’ respective obligations under relevant laws and regulations. They also reflect the information needed by the business partners, to assess the sustainability risk profile of the undertaking, e.g. as a (potential) supplier or a (potential) borrower.

The text below provides the list of disclosures from C1 to C9 to be considered and reported upon, if they are applicable to the undertaking’s business and organisation. When one of these disclosures is omitted, it is assumed to not be applicable.

Additional guidance on disclosures C1 to C9 is available in paragraphs 145 to 180 of Annex II of this Recommendation.

Strategy: Business Model and Sustainability – Related Initiatives

The undertaking shall disclose the key elements of its business model and strategy, including:

a description of significant groups of products and/or services offered;

a description of significant market(s) the undertaking operates in (such as B2B, wholesale, retail, countries);

a description of main business relationships (such as key suppliers, customers, distribution channels); and

if the strategy has key elements that relate to or affect sustainability issues, a brief description of those key elements.

Description of practices, policies and future initiatives for transitioning towards a more sustainable economy

If the undertaking has put in place specific practices, policies or future initiatives for transitioning towards a more sustainable economy, which it has already reported under disclosure B2 in the Basic Module, it shall briefly describe them. The undertaking may use the template found in paragraph 149 of Annex II of this Recommendation for this purpose.

The undertaking may indicate the most senior level within its employees that is accountable for implementing the policies when this has been determined by the undertaking.

Consideration when reporting on GHG emissions under B3 (Basic Module)

Depending on the type of activities carried out by the undertaking, disclosing a quantification of its Scope 3 GHG emissions can be appropriate (see paragraph 10 of this Standard) to yield relevant information on the undertaking’s value chain impacts on climate change.

Scope 3 emissions are indirect GHG emissions (other than Scope 2) that derive from an undertaking’s value chain. They include the activities that are upstream of the undertaking’s operations (e.g. purchased goods and services, purchased capital goods, transportation of purchased goods, etc.) and activities that are downstream of the undertaking’s operations (e.g. transport and distribution of the undertaking’s products, use of sold products, investments, etc.).

If the undertaking decides to provide this metric, it should refer to the 15 types of Scope 3 GHG emissions identified by the GHG Protocol Corporate Standard and detailed by the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard. When it reports on Scope 3 GHG emissions, the undertaking shall include significant Scope 3 categories (as per the Corporate Value Chain (Scope 3) Accounting and Reporting Standard) based on its own assessment of relevant Scope 3 categories. Undertakings can find further guidance on specific calculation methods for each category in the GHG Protocol’s Technical guidance for Calculating Scope 3 Emissions.

When reporting its Scope 1 and Scope 2 emissions, if the undertaking discloses entity-specific information on its Scope 3 emissions, it shall present it together with the information required under B3 – Energy and greenhouse gas emissions.

GHG reduction targets and climate transition

If the undertaking has established GHG emission reduction targets, it shall disclose its targets in absolute values for Scope 1 and Scope 2 emissions. In line with paragraphs 50 to 53 above and if it has set Scope 3 reduction targets, the undertaking shall also provide targets for significant Scope 3 emissions. In particular, it shall provide:

the target year and target year value;

the base year and base year value;

the units used for targets;

the share of Scope 1, Scope 2 and, if disclosed, Scope 3 that the target concerns; and

a list of main actions it seeks to implement to achieve its targets.

If the undertaking that operates in high climate impact sectors (6) has adopted a transition plan for climate change mitigation, it may provide information about it, including an explanation of how it is contributing to reduce GHG emissions.

In case the undertaking operates in high-climate impact sectors and does not have a transition plan for climate change mitigation in place, it shall indicate whether and, if so, when it will adopt such a transition plan.

Climate risks

If the undertaking has identified climate-related hazards and climate-related transition events, creating gross climate-related risks for the undertaking, it shall:

briefly describe such climate-related hazards and climate-related transition events;

disclose how it has assessed the exposure and sensitivity of its assets, activities and value chain to these hazards and transition events;

disclose the time horizons of any climate-related hazards and transition events identified; and

disclose whether it has undertaken climate change adaptation actions for any climate-related hazards and transition events.

The undertaking may disclose the potential adverse effects of climate risks that may affect its financial performance or business operations in the short-, medium- or long-term, indicating whether it assesses the risks to be high, medium, low.

Additional (general) workforce characteristics

If the undertaking employs 50 or more employees, it may disclose the female-to-male ratio at management level for the reporting period.

If the undertaking employs 50 or more employees, it may disclose the number of those self-employed without personnel who are working exclusively for the undertaking, and temporary workers provided by undertakings primarily engaged in ‘employment activities’.

Additional own workforce information - Human rights policies and processes

The undertaking shall disclose an answer to the following questions.

Does the undertaking have a code of conduct or human rights policy for its own workforce? (YES/NO)

If yes, does this cover:

child labour (YES/ NO);

forced labour (YES/ NO);

human trafficking (YES/NO);

discrimination (YES/NO);

accident prevention (YES/NO); or

other? (YES/NO – if yes, specify).

Does the undertaking have a complaints-handling mechanism for its own workforce? (YES/ NO)

Severe negative human rights incidents

The undertaking shall disclose an answer to the following questions:

Does the undertaking have confirmed incidents in its own workforce related to:

child labour (YES/ NO);

forced labour (YES/ NO);

human trafficking (YES/ NO);

discrimination (YES/ NO); or

other? (YES/NO – if yes, specify).

If yes, the undertaking may describe the actions being taken to address the incidents described above.

Is the undertaking aware of any confirmed incidents involving workers in the value chain, affected communities, consumers and end-users? If yes, specify.

Revenues from certain activities and exclusion from EU reference benchmarks

If the undertaking is active in one or more of the following sectors, it shall disclose related revenues derived from activities in:

controversial weapons (anti-personnel mines, cluster munitions, chemical weapons and biological weapons);

the cultivation and production of tobacco;

fossil fuel (coal, oil and gas) sector (i.e. the undertaking derives revenues from exploration, mining, extraction, production, processing, storage, refining or distribution, including transportation, storage and trade, of fossil fuels as defined in Article 2, point (62), of Regulation (EU) 2018/1999 of the European Parliament and the Council (7) ), including a disaggregation of revenues derived from coal, oil and gas; or

chemicals production if the undertaking is a manufacturer of pesticides and other agrochemical products.

The undertaking shall disclose whether it is excluded from any EU reference benchmarks that are aligned with the Paris Agreement as described in paragraph 177 of Annex II of this Recommendation.

Gender diversity ratio in the governance body

If the undertaking has a governance body in place, the undertaking shall disclose the related gender diversity ratio.

Footnotes

(1)This includes self-employed, non-incorporated undertakings and listed micro undertakings. ↩
(2)For example, the legal requirement to disclose specific information, or already voluntarily disclosing specific information through an Environmental Management System. ↩
(3)In a future online tool version of the VSME Standard, when appropriate, the undertaking may refer to disclosures published in other documents rather than the sustainability report using incorporation by reference. Such reference is made by including the page number of the relevant source, provided that the PDF format of the source document is also made available in the online tool version. ↩
(4)The registered address is the official address of the undertaking. ↩
(5)In a future online tool version of the VSME Standard, this will be automatically calculated. ↩
(6)High climate impact sectors are those listed in NACE Sections A to H and Section M as defined in Annex I to Delegated Regulation (EU) 2023/137. ↩
(7)Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action, amending Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of the European Parliament and of the Council ( OJ L 328, 21.12.2018, p. 1 ). ↩