EFRAG’s Voluntary Sustainability Reporting Standard simplifies ESG reporting for non-listed SMEs, enhancing access to green financing and promoting sustainable economic growth.
EFRAG has introduced the Voluntary Sustainability Reporting Standard (VSME) for non-listed small and medium-sized enterprises (SMEs), aiming to simplify sustainability reporting and boost access to green financing. This initiative aligns with the European Commission’s 2023 SME Relief Package, addressing the unique needs of SMEs in transitioning toward sustainable practices.
Streamlining ESG Reporting for SMEs
The VSME introduces a standardized framework divided into Basic and Comprehensive Modules, replacing multiple uncoordinated requests for ESG data. This framework is designed to meet the requirements of business partners, including banks, investors, and larger corporations, while reducing administrative burdens for SMEs.
Patrick de Cambourg, Chair of EFRAG’s Sustainability Reporting Board, stated, “VSME is designed to support the availability of simple but relevant sustainability-related data, reducing the burden for SMEs. With the right tools, it offers new business and financing opportunities while enhancing management insights.”
Supporting SMEs in Accessing Green Financing
The VSME plays a crucial role in helping SMEs secure sustainable finance by meeting the standardized disclosure requirements expected by financial institutions and stakeholders. This framework supports the broader goals of the EU's SME Relief Package, emphasizing the importance of green financing in driving sustainable economic growth.
Chiara Del Prete, Chair of EFRAG’s Sustainability Reporting Technical Expert Group, shared her perspective: “The development of VSME has been a very enriching experience. I am grateful to all those who contributed and look forward to supporting SMEs with practical guides and promoting synergies to build a robust SME ecosystem.”
Tools and Guidance for Widespread Adoption
To promote adoption, EFRAG plans to launch additional resources in 2025, including digital tools, educational guides, and outreach initiatives. These efforts aim to ensure that SMEs can seamlessly integrate sustainability reporting into their business processes while reaping the benefits of improved market opportunities and green finance.
With the VSME, EFRAG underscores its commitment to empowering SMEs on their sustainability journey, fostering economic resilience and environmental responsibility.
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