The Evolution of VSME: Meet the New European Voluntary Sustainability Standard (VS)
On July 3, 2026, the European Commission took a major step toward simplifying sustainability reporting for non-listed companies. In a highly anticipated regulatory update, the Commission formally adopted the delegated regulation establishing the new Voluntary Standard (VS) for sustainability disclosures.
This standard, which builds directly on EFRAG’s technical work on the Voluntary SME standard (VSME), introduces key naming and structural changes that every mid-market business and SME in Europe needs to understand.
Here is a breakdown of what has changed, why the new framework is structured the way it is, and what this means for your value-chain reporting.
1. The Naming Shift: Why "VSME" Became "VS"
If you have been following EU ESG regulation, you are likely familiar with the term VSME (Voluntary Sustainability Reporting Standard for non-listed SMEs). However, in the latest Commission adoption, the standard is increasingly referred to simply as the Voluntary Standard (VS).
This is not just a minor editing tweak. The naming change reflects a deliberate expansion of the standard’s scope:
- Original VSME Scope: Primarily aimed at non-listed micro, small, and medium-sized enterprises (typically those with fewer than 250 employees).
- New VS Scope: Recast to serve a broader range of non-listed companies. Following the Omnibus I simplification package, which narrowed the mandatory CSRD reporting requirements, the new voluntary standard is now the designated reference framework for non-listed companies with up to 1,000 employees and €450 million in annual turnover.
Why are larger companies reporting voluntarily?
Even though the Omnibus package exempted companies with 250-999 employees from mandatory reporting, these firms still face immense pressure. Large corporate buyers (who are subject to mandatory CSRD) and commercial banks (who require ESG data for financing) demand sustainability metrics from their business partners. The VS standard provides a standard format to satisfy these demands.
2. Structurally unchanged
Despite the name change the VS standard does not differ significantly in content or structure from the VSME standard. There are certain carve-outs and specific references to other EU regulations taht have been added but generally the data points and the associated guidance has stayed the same. One thing that might change the structure for some very small companies (10 employees or less) is the new value chain cap definition that defines the amount of data points that can be requested by customers. The value chaincap is set at the whole VS standard for other SME's but it is significantly reduced for said very small companies.:
| Draft Structure (Exposure Drafts) | Finalized VS Structure (Adopted July 2026) | Purpose & Content |
|---|---|---|
| Basic Module | Basic Module (B1–B11) | The foundational, entry-level module. Covers 11 disclosures (prefixed with B) including general company policies, Scope 1 and 2 GHG emissions, workforce stats, and anti-corruption. |
| Comprehensive Module (C1–C9) | Adds 9 disclosures (prefixed with C) focusing on strategic targets (such as GHG reduction plans), ESG policies, and value-chain incident management. This module is excluded by the value chain cap for companies with 10 employees or less. |
Core Principles of the VS Structure:
- No Materiality Assessment Required: Unlike the mandatory ESRS for large corporations, the VS standard does not require companies to go through a complex and expensive double materiality assessment.
- The "If Applicable" Principle: Disclosures are only reported if they are relevant to your company’s sector and operations, preventing you from wasting resources on non-applicable metrics.
3. The "Value Chain Cap" – Your Shield Against Questionnaire Fatigue
Perhaps the most critical business outcome of the Omnibus and the VS standard is its role as a legal "Value Chain Cap."
Many suppliers complain about the "EcoVadis Tax"—the administrative burden of answering multiple, fragmented, and often inconsistent ESG questionnaires from different corporate buyers and banks.
Under the adopted delegated act, the European Commission establishes that the VS standard acts as a maximum limit. Large CSRD-reporting corporations cannot demand more sustainability data from their SME value-chain partners than what is covered in the Voluntary Standard (VS).
If you complete a VS report (starting with the Basic Module), you have a standardized, audit-ready document that you can share with all corporate buyers and financial institutions, shielding your team from endless custom surveys. However there is already discussion around the legal basis for this especially around sector specific sustainability information that might be critical for large contractors in many sectors.
How to Prepare for the VS Standard
- Start with the Basic Module: Don't try to report on everything at once. Build your data baseline around the 11 disclosures of the Basic Module (energy consumption, Scope 1 & 2 emissions, and employee health/safety).
- Utilize Digital Templates: EFRAG has released a digital Excel template and an official XBRL Taxonomy for the VS standard. Using tools that export to these digital formats ensures your data is machine-readable and easily digestible by large corporate buyers.
- Position ESG as a Bidding Asset: With sustainability weighting taking up to 50% of the decision score in public and private tenders, a completed VS report is a competitive advantage that can help you win bids over non-reporting competitors.
To learn more about how to automate your Voluntary Standard reporting in under 15 minutes, check out our guide on how to automate your voluntary sustainability report.
Official Resources & Further Reading:
- Read the European Commission's official updates on the Adoption of the Voluntary Standard (July 3, 2026).
- Access the technical drafts, modules, and translation documents on the EFRAG SME Sustainability Reporting Page.
- Watch the European SME first-hand experiences in EFRAG's SME Testimonial Series.