Voluntary Sustainability Reporting Standard for SMEs (VSME)

What is the voluntary sustainability reporting standard for SMEs (VSME)?

EFRAG (European Financial Reporting Advisory Group) was tasked by the European Commission to develop a voluntary sustainability reporting standard for non-listed micro, small and medium enterprises (VSME), that were outside the scope of the European Union’s (EU) Corporate Sustainability Reporting Directive (CSRD) (2022).

Central to EFRAG’s task was to develop a voluntary, simple, and standardised framework for SMEs to report on environmental, social and governance (ESG) topics, creating better opportunities to obtain green financing, communicate their sustainability performance to potential customer businesses, and in so doing facilitating the transition to a sustainable economy.

On 17 December 2024, EFRAG delivered the VSME Standard to the European Commission.

Standardising multiple ESG requests and market acceptance of the VSME

Based on market acceptance, the VSME is expected to standardise the current multiple ESG data requests (which represent a cost of preparation for non-listed SMEs), by reducing the number of uncoordinated requests they receive. This is expected to support them in having better access to lenders, investors and business customers. On 30 July 2025, the European Commission published its Recommendation to member states (C(2025) 4984 final) on a voluntary sustainability reporting standard for small and medium-sized undertakings. One of the recommendations was to member states to raise awareness among SMEs of the benefits of voluntarily reporting sustainability information in accordance with the VSME standard. It also recommends that member states take appropriate measures at national level to foster the implementation and market acceptance of the VSME.

Why a VSME sustainability report for NSAI?

For NSAI, this was our own voluntary initiative. NSAI’s Climate Action and Sustainability Centre of Excellence led the development of NSAI’s first VSME report. A key starting point is that it is NSAI’s ambition to be a climate action and sustainability exemplar – internally, in how we do our business, and externally in how we support businesses and trade.

NSAI has a number of mandatory climate action and social equality requirements, with reporting mechanisms for those; but we were interested in looking at a voluntary report that would gather all the broader pieces of information together in one place – and ‘stretch us’ too, to look at areas where we could do something different, better or new.

Also, although NSAI was outside the scope of the EU’s Corporate Sustainability Reporting Directive (the ‘CSRD’) – even before the CSRD Omnibus amendments – we wanted to do something on our scale that aligns with the CSRD’s intentions.

One single, sustainability and ESG report offers NSAI one place to present all that kind of information. It also offers us the potential to measure and identify where we’re doing well and where we could see opportunities for improvement.

Why make NSAI’s first VSME report available publicly?

NSAI decided to make its first VSME report publicly available to support knowledge transfer to SMEs and micro-enterprises, by sharing a worked example of a VSME report prepared in-house using the free, open-source digital reporting templates developed by EFRAG. In making its first VSME report publicly available, it is also intended to support wider use and market acceptance of the VSME standard for voluntary sustainability and ESG reporting in Ireland and across the EU.

The format of NSAI’s first VSME report (covering 2024) was revised to demonstrate use of the February 2026 version of EFRAG’s VSME digital reporting templates and is designed to be machine readable.

NSAI’s first voluntary sustainability and ESG report, prepared in-house using the EFRAG VSME standard and its free, open-source digital reporting tools is available. 

 

Click here to read the ESG report

 

EFRAG testimonial videos: “SME Sustainability Reporting: Hear their experience”

EFRAG has produced a series of testimonial videos from SME and micro-enterprise organisations, including NSAI, who have shared their lessons learned and experiences of using the VSME standard.

To support knowledge transfer, those testimonial videos are available here.