KEY ESG now supports EFRAG's Voluntary Sustainability Reporting Standard for non-listed SMEs, known as the vSME, within its sustainability data management platform. Companies and fund managers alike can now collect, manage, and report vSME-aligned sustainability data alongside existing frameworks like SFDR, InvestEurope, CSRD, and carbon accounting.
This article explains what the vSME is, why it matters in the context of the EU Omnibus simplification package, and how KEY ESG's implementation works in practice.
What is the vSME standard?
The vSME (Voluntary Sustainability Reporting Standard for non-listed SMEs) is a sustainability reporting framework developed by EFRAG (the European Financial Reporting Advisory Group). It was finalised in December 2024 and formally recommended by the European Commission on 30 July 2025.
The standard was created to solve a specific problem: small and medium-sized enterprises across Europe were being overwhelmed by fragmented, inconsistent ESG data requests from banks, investors, and larger companies in their supply chains. Before the vSME, there was no single standardised framework that SMEs could use to respond to these requests efficiently.
The vSME replaces the need for a full double materiality assessment, which is required under the CSRD's European Sustainability Reporting Standards (ESRS), with a simpler "if applicable" principle. This makes the standard far more accessible for companies with limited sustainability reporting experience or resources.
How is the vSME structured?
The vSME is organised into two reporting modules, each designed for different levels of reporting depth.
The vSME Basic Module (B1–B11) establishes minimum reporting requirements. It covers core environmental, social, and governance disclosures and is designed primarily for micro-undertakings. This module provides a manageable entry point for companies that are new to structured sustainability reporting.
The vSME Comprehensive Module (C1–C9) extends coverage to address the information needs of banks, investors, and corporate clients. It includes more detailed disclosures on topics such as energy and emissions, workforce conditions, and governance practices. This module is well suited both for standalone companies looking to strengthen their access to sustainable finance and for PE-backed portfolio companies that need to satisfy LP reporting requirements.
Companies that adopt a module must implement it in its entirety - partial adoption is not permitted. However, the "if applicable" principle means that disclosures can be omitted where they are genuinely not relevant to the company's operations.
Why does the vSME matter now? The EU Omnibus context
The EU Omnibus I simplification package, which reached provisional agreement in December 2025, has significantly reshaped the European sustainability reporting landscape. Under the Omnibus agreement, mandatory CSRD reporting now applies only to companies with more than 1,000 employees and over €450 million in net annual turnover. This is a substantial narrowing of scope; thousands of companies that were previously preparing for mandatory CSRD disclosure now fall outside it.
However, falling out of CSRD scope does not mean that sustainability reporting requirements disappear. The Omnibus package explicitly positions the vSME as the foundation for future voluntary sustainability reporting in three important ways.
First, the European Commission has stated that the vSME will form the basis of a future delegated act establishing a voluntary reporting standard for companies with up to 1,000 employees. Second, the Omnibus introduces strengthened "value chain cap" protections that reference the vSME; companies subject to CSRD cannot demand sustainability information from smaller supply chain partners beyond what the vSME standard covers. Third, the European Commission's July 2025 recommendation encourages banks, investors, and large corporates to base their ESG data requests to SMEs on the vSME wherever possible.
In practical terms, vSME-aligned reporting is becoming the expected baseline for companies that are not subject to mandatory CSRD.
Who should report using the vSME?
The vSME is relevant for a broad range of organisations across Europe.
Non-listed SMEs looking to improve access to sustainable finance. Banks and investors are increasingly basing lending and investment decisions on structured ESG data. The vSME gives standalone companies a recognised, standardised way to present their sustainability performance, without the cost and complexity of full CSRD reporting.
Companies responding to value chain data requests from larger corporates or financial institutions that are themselves subject to CSRD. Rather than fielding ad hoc questionnaires, the vSME provides a clear framework for responding to these requests proportionately and consistently.
Portfolio companies of private equity firms in Europe that fall below the revised CSRD thresholds but still need to provide credible sustainability data to their investors. Reporting against the vSME Comprehensive Module offers a standardised approach to meeting LP and fund manager data requests.
Organisations preparing for future regulatory compliance. The Omnibus agreement includes a review clause requiring the European Commission to reassess CSRD scope thresholds by 2031. Companies that begin vSME reporting now, whether standalone or PE-backed, will be better positioned if scope is broadened again in the future.
Companies undergoing ownership transitions that want to maintain sustainability data continuity through M&A processes, ensuring consistent reporting regardless of changes in corporate structure.
How does vSME reporting work in KEY ESG?
KEY ESG's implementation includes both the vSME Basic Module and Comprehensive Module within the platform's Metric Library. Here is how it works in practice.
Both modules support flexible reporting cadences, monthly, quarterly, or annual, so companies can align data collection with their existing reporting cycles. The vSME metrics integrate with KEY ESG's existing framework coverage, including SFDR, InvestEurope, and carbon reporting. Where metrics overlap between frameworks, data is shared automatically, eliminating duplicate data entry and ensuring consistency across disclosures.
For standalone companies, this means vSME reporting slots into the same platform used for carbon accounting and any other frameworks already in place — no separate tools or processes required. For fund managers, portfolio companies reporting against the vSME feed into the same centralised dashboard used for other frameworks, providing a single view of ESG performance across the portfolio.
To get started, navigate to Framework Management within the KEY ESG platform, enable either the Basic Module or Comprehensive Module based on your reporting needs, configure applicable disclosures for your organisation, and begin data collection.
Learn more about the vSME standard
Already a KEY ESG customer? Contact your Customer Success Manager or reach out to our support team to enable vSME reporting for your company or portfolio.
New to KEY ESG? If you'd like to see how vSME reporting works, whether for a standalone company or across a portfolio, request a demo.
Frequently asked questions about vSME reporting
Is the vSME mandatory?
No. The vSME is a voluntary reporting standard. It is not required by law. However, the European Commission has recommended its use, and it is increasingly expected by investors, banks, and large corporate partners as the standard way for SMEs to report sustainability data.
What is the difference between the vSME and the CSRD?
The CSRD (Corporate Sustainability Reporting Directive) is a mandatory reporting requirement for large EU companies, using the detailed European Sustainability Reporting Standards (ESRS). The vSME is a simplified, voluntary alternative designed for non-listed SMEs that fall outside CSRD scope. It does not require a double materiality assessment and uses an "if applicable" approach to disclosures.
How does the EU Omnibus package affect the vSME?
The Omnibus I agreement (December 2025) narrowed CSRD scope to companies with over 1,000 employees and €450 million turnover. The vSME is positioned as the voluntary reporting standard for companies below these thresholds. The Omnibus also introduced value chain cap provisions that limit what larger companies can ask of smaller partners, using the vSME as the benchmark.
Can KEY ESG help with both vSME and CSRD reporting?
Yes. KEY ESG supports both the vSME and full CSRD/ESRS reporting within a single platform. Companies can transition between frameworks as their reporting obligations evolve, and fund managers can manage portfolios that include companies reporting under different standards.
Which vSME module should my company use?
The Basic Module (B1–B11) is suited to micro-undertakings with straightforward operations and limited previous sustainability reporting. The Comprehensive Module (C1–C9) is more appropriate for companies, whether standalone or PE-backed, that have investor, banking, or corporate client relationships requiring more detailed ESG disclosures.
KEY ESG now supports EFRAG's Voluntary Sustainability Reporting Standard for non-listed SMEs, known as the vSME, within its sustainability data management platform. Companies and fund managers alike can now collect, manage, and report vSME-aligned sustainability data alongside existing frameworks like SFDR, InvestEurope, CSRD, and carbon accounting.
This article explains what the vSME is, why it matters in the context of the EU Omnibus simplification package, and how KEY ESG's implementation works in practice.
What is the vSME standard?
The vSME (Voluntary Sustainability Reporting Standard for non-listed SMEs) is a sustainability reporting framework developed by EFRAG (the European Financial Reporting Advisory Group). It was finalised in December 2024 and formally recommended by the European Commission on 30 July 2025.
The standard was created to solve a specific problem: small and medium-sized enterprises across Europe were being overwhelmed by fragmented, inconsistent ESG data requests from banks, investors, and larger companies in their supply chains. Before the vSME, there was no single standardised framework that SMEs could use to respond to these requests efficiently.
The vSME replaces the need for a full double materiality assessment, which is required under the CSRD's European Sustainability Reporting Standards (ESRS), with a simpler "if applicable" principle. This makes the standard far more accessible for companies with limited sustainability reporting experience or resources.
How is the vSME structured?
The vSME is organised into two reporting modules, each designed for different levels of reporting depth.
The vSME Basic Module (B1–B11) establishes minimum reporting requirements. It covers core environmental, social, and governance disclosures and is designed primarily for micro-undertakings. This module provides a manageable entry point for companies that are new to structured sustainability reporting.
The vSME Comprehensive Module (C1–C9) extends coverage to address the information needs of banks, investors, and corporate clients. It includes more detailed disclosures on topics such as energy and emissions, workforce conditions, and governance practices. This module is well suited both for standalone companies looking to strengthen their access to sustainable finance and for PE-backed portfolio companies that need to satisfy LP reporting requirements.
Companies that adopt a module must implement it in its entirety - partial adoption is not permitted. However, the "if applicable" principle means that disclosures can be omitted where they are genuinely not relevant to the company's operations.
Why does the vSME matter now? The EU Omnibus context
The EU Omnibus I simplification package, which reached provisional agreement in December 2025, has significantly reshaped the European sustainability reporting landscape. Under the Omnibus agreement, mandatory CSRD reporting now applies only to companies with more than 1,000 employees and over €450 million in net annual turnover. This is a substantial narrowing of scope; thousands of companies that were previously preparing for mandatory CSRD disclosure now fall outside it.
However, falling out of CSRD scope does not mean that sustainability reporting requirements disappear. The Omnibus package explicitly positions the vSME as the foundation for future voluntary sustainability reporting in three important ways.
First, the European Commission has stated that the vSME will form the basis of a future delegated act establishing a voluntary reporting standard for companies with up to 1,000 employees. Second, the Omnibus introduces strengthened "value chain cap" protections that reference the vSME; companies subject to CSRD cannot demand sustainability information from smaller supply chain partners beyond what the vSME standard covers. Third, the European Commission's July 2025 recommendation encourages banks, investors, and large corporates to base their ESG data requests to SMEs on the vSME wherever possible.
In practical terms, vSME-aligned reporting is becoming the expected baseline for companies that are not subject to mandatory CSRD.
Who should report using the vSME?
The vSME is relevant for a broad range of organisations across Europe.
Non-listed SMEs looking to improve access to sustainable finance. Banks and investors are increasingly basing lending and investment decisions on structured ESG data. The vSME gives standalone companies a recognised, standardised way to present their sustainability performance, without the cost and complexity of full CSRD reporting.
Companies responding to value chain data requests from larger corporates or financial institutions that are themselves subject to CSRD. Rather than fielding ad hoc questionnaires, the vSME provides a clear framework for responding to these requests proportionately and consistently.
Portfolio companies of private equity firms in Europe that fall below the revised CSRD thresholds but still need to provide credible sustainability data to their investors. Reporting against the vSME Comprehensive Module offers a standardised approach to meeting LP and fund manager data requests.
Organisations preparing for future regulatory compliance. The Omnibus agreement includes a review clause requiring the European Commission to reassess CSRD scope thresholds by 2031. Companies that begin vSME reporting now, whether standalone or PE-backed, will be better positioned if scope is broadened again in the future.
Companies undergoing ownership transitions that want to maintain sustainability data continuity through M&A processes, ensuring consistent reporting regardless of changes in corporate structure.
How does vSME reporting work in KEY ESG?
KEY ESG's implementation includes both the vSME Basic Module and Comprehensive Module within the platform's Metric Library. Here is how it works in practice.
Both modules support flexible reporting cadences, monthly, quarterly, or annual, so companies can align data collection with their existing reporting cycles. The vSME metrics integrate with KEY ESG's existing framework coverage, including SFDR, InvestEurope, and carbon reporting. Where metrics overlap between frameworks, data is shared automatically, eliminating duplicate data entry and ensuring consistency across disclosures.
For standalone companies, this means vSME reporting slots into the same platform used for carbon accounting and any other frameworks already in place — no separate tools or processes required. For fund managers, portfolio companies reporting against the vSME feed into the same centralised dashboard used for other frameworks, providing a single view of ESG performance across the portfolio.
To get started, navigate to Framework Management within the KEY ESG platform, enable either the Basic Module or Comprehensive Module based on your reporting needs, configure applicable disclosures for your organisation, and begin data collection.
Learn more about the vSME standard
Already a KEY ESG customer? Contact your Customer Success Manager or reach out to our support team to enable vSME reporting for your company or portfolio.
New to KEY ESG? If you'd like to see how vSME reporting works, whether for a standalone company or across a portfolio, request a demo.
Frequently asked questions about vSME reporting
Is the vSME mandatory?
No. The vSME is a voluntary reporting standard. It is not required by law. However, the European Commission has recommended its use, and it is increasingly expected by investors, banks, and large corporate partners as the standard way for SMEs to report sustainability data.
What is the difference between the vSME and the CSRD?
The CSRD (Corporate Sustainability Reporting Directive) is a mandatory reporting requirement for large EU companies, using the detailed European Sustainability Reporting Standards (ESRS). The vSME is a simplified, voluntary alternative designed for non-listed SMEs that fall outside CSRD scope. It does not require a double materiality assessment and uses an "if applicable" approach to disclosures.
How does the EU Omnibus package affect the vSME?
The Omnibus I agreement (December 2025) narrowed CSRD scope to companies with over 1,000 employees and €450 million turnover. The vSME is positioned as the voluntary reporting standard for companies below these thresholds. The Omnibus also introduced value chain cap provisions that limit what larger companies can ask of smaller partners, using the vSME as the benchmark.
Can KEY ESG help with both vSME and CSRD reporting?
Yes. KEY ESG supports both the vSME and full CSRD/ESRS reporting within a single platform. Companies can transition between frameworks as their reporting obligations evolve, and fund managers can manage portfolios that include companies reporting under different standards.
Which vSME module should my company use?
The Basic Module (B1–B11) is suited to micro-undertakings with straightforward operations and limited previous sustainability reporting. The Comprehensive Module (C1–C9) is more appropriate for companies, whether standalone or PE-backed, that have investor, banking, or corporate client relationships requiring more detailed ESG disclosures.
