The VSME Standard in Action – From the European Commission’s Recommendation to Digital Solutions

Key takeaways from the outreach event “The VSME Standard in Action – From the European Commission’s Recommendation to Digital Solutions” on October 6, 2025:

The event was organized following the European Commission’s (EC) Recommendation on the VSME Standard, to provide insights into EFRAG’s mapping of platforms and tools supporting SME sustainability reporting, and to present the latest updates on the VSME Digital Template and Knowledge Hub.

Patrick de Cambourg, Chair of EFRAG SRB, introduced by explaining that the VSME standard addresses a critical concern: the availability of reliable sustainability data, for the SMEs themselves and for their counterparts, including value chain actors, investors and lenders.

SMEs are in need of more support to reduce dependency on consultants and advanced in-house skills. The challenge is key to navigating a very complex environment, with a multiplication of questionnaires and uncertainties, that creates the risk of focusing on compliance instead of the critical issues that SMEs are facing to make informed decisions.

Sven Genter from the European Commission explained that the aim of the VSME standard is to serve as a common basis for SME sustainability data that is “not too overwhelming but still delivers needed information”.

Currently SMEs are facing many “different requests from different organizations in different formats with different questions”, and are “overwhelmed by the details of the requests”.

Nina Schindler, CEO at the European Association of Co-operative Banks (EACB), stressed that sustainability information was “not a nice to have” but that it’s “indispensable from a bank perspective” and that the VSME will play an important role in the value chain cap on information requests.

Approx. 800 people participated in yesterday’s outreach event.

The online polls revealed that approx. 50% use Excel or manual spreadsheets for GHG emissions reporting, and 22% use third-party consultancy tools/services. Only 21% use specialized GHG calculator software. The key challenge faced when using GHG calculators is the complexity of data input requirements (46%).

To support SMEs in getting digitized, EFRAG has shortlisted 12 GHG tools and calculators whereof only one is not free of charge (the Bilan Carbone+ developed by French ADEME), as part of a snapshot of the current offer.

EFRAG encourages GHG government-endorsed free calculators at EU-level, and suggested that future options could include other datapoints such as water stress, biodiversity, etc.

It was also pointed out that high quality reliable emission factors are lacking and are needed at a European level, together with an alignment on methodology and scope for governmental endorsement.

Another online poll revealed that 64% have not yet used EFRAG’s VSME Digital (Excel) Template, while 14% have used it and found it very useful.

EFRAG released an updated version of the template on Oct 3, now supporting English, Spanish, Polish, Lithuanian and Portuguese. Additional translations are planned in November, once reviewed by national standard setters. Potential future releases in 2026 may include additional features such as digital signatures, distribution hub, etc.

An online poll revealed that 40% are not aware of any digital platforms designed to support SMEs in sustainability reporting, but that 42% currently use one.

EFRAG has listed 20 (non-exhaustive) self-assessed current platforms and initiatives, whereof 5 were identified as being developed at the governmental level. The Danish, German, French platforms have self-declared full alignment.

EFRAG pointed out that there is currently a low level of self-declared alignment, and that EFRAG could develop a certification mechanism to increase alignment in the coming months. Certified VSME alignment was also a key request amongst participants.

The support material and tools are available at EFRAG’s VSME web page: https://www.efrag.org/en/smes-and-sustainability-reporting

ESMA addressing misleading sustainability-related claims and greenwashing risks

On July 1st, ESMA published thematic notes on clear, fair & not misleading sustainability-related claims, addressing greenwashing risks in support of sustainable investments.

This is valuable information for any company writing a sustainability report, whether compliant with ESRS or VSME

In line with the work carried out by ESMA on greenwashing, in which good and bad practices have been observed, the aim is to

  • explain and clarify ESMA’s expectations towards market participants when making sustainability claims,
  • remind market participants about their responsibility to make claims only to the extent that they are clear, fair and not misleading.

Market participants should acquaint themselves with the below four principles for making sustainability claims to ensure that all claims are clear, fair, and not misleading and thereby avoid the risk of greenwashing.

Misleading claims can in particular take the form of cherry-picking, exaggeration, omission, vagueness, inconsistency, lack of meaningful comparisons or thresholds, misleading imagery or sounds, etc.

The 4 principles to follow are, in short:

1) Accurate

Sustainability claims should fairly and accurately represent the entity’s sustainability profile, without exaggeration and avoiding falsehoods.

Claims should be precise and be based on all relevant positive and negative aspects.

Omission and cherry-picking should be avoided.

Claims should steer clear of vagueness and excessive references to irrelevant or non-binding information.

2) Accessible

Sustainability claims should be based on information that is easy to access and easy to browse through by readers and at an appropriate level of detail so they are understandable.

Claims should not be oversimplistic but should be easy to understand.

3) Substantiated

Sustainability claims should be substantiated with clear and credible reasoning, facts and processes.

Substantiation should be based on methodologies (including comparisons, thresholds or underlying assumptions) that are fair, proportionate and meaningful.

Limitations of information, data and metrics used in a claim should be made available.

Comparisons should make clear what is being compared, how the comparison is made and, if possible, compare “like with like”.

4) Up to date

Sustainability claims should be based on information that is up to date with any material change to be disclosed in a timely manner.

The clear indication of the analysis’ date and perimeter could be useful for this purpose.

 

ESG credentials

ESMA also points out that references to ESG credentials are among the most prominently used claims in retail-investor focused communications.

These include references to qualifications, labels, ratings, certificates -and can be misleading in several ways.

For instance, by overstating the significance of having a given label, of receiving an ESG award, of being signatory to a voluntary framework, etc.

Clarify if the labels’ underlying criteria are focused solely on having in place processes, and/ or if they also require delivering on specific positive sustainability outcomes.

Be transparent about the governance around the process of the awarding body, the eligibility criteria, the date of the different versions or updates and clarify if the label/award consists of subcategories.

When using a credential attributed by entities that may also sell paid services, do clarify any potential conflict of interest and payment of fees to the attributing entities (e.g. if your entity was a sponsor of the ESG award).

Mention for which period the ESG award was given and when it was received.

 

Access the full thematic note, with ESMA’s Do’s and Don’ts here:

https://www.esma.europa.eu/sites/default/files/2025-07/ESMA36-429234738_-154_Thematic_notes_on_clear__fair___not_misleading_sustainability-related_claims.pdf

 

#getCSRDready, #CSRD, #ESRS, #ESG, #Strategy, #Governance, #RiskManagement #SustainabilityReporting, #Digitalisation, #Cleerit

ESRS, VSME or nothing at all – that’s the question

Are you a 2nd wave CSRD in-scope company with less than 1000 employees, wondering what to do?

Some companies focus primarily on meeting reporting requirements, and now wonder where to concentrate their efforts, on ESRS or VSME? Or do nothing at all?

Other leading companies are already prepared and have discovered how structured sustainability reporting processes drive business value.

They use the ESRS standards as a tool to analyze their operations, identify risks and opportunities, and future-proof their business decisions and competitiveness.

The ESRS standards have been conceived to help you get future-ready.

That’s why they are based on your specific impacts, risks & business opportunities, and your plans to manage them.

VSME helps you share your sustainability information. It is an excellent choice for small companies to get started with a relevant and proportionate one-stop-shop report.

Your choice will be based on your specific circumstances, ambitions and possibilities.

⭕ Preparing with the ESRS standards – with a learning mind-set and based on your materiality assessment – is the best choice for you, if you

🌿 operate in a sector facing sustainability challenges (industry, real estate, transportation…) – chances are that demands from financial actors, business partners, customers and rating agencies will remain high for your company;

🌿 are more than 500 employees and up against listed 1st wave competitors – chances are that your competitors will come out on top if you are less prepared;

🌿 have already worked on your DMA – the difficult part is already done, and there are many phase-ins in ESRS, especially if you have less than 750 employees (no phase-ins exist in VSME – you will need to report on your own workforce from year one, for example).

⭕ If it’s your first time reporting on sustainability and you have not yet started your DMA,

🌿VSME is a good choice for 2025 – and a steppingstone to ESRS reporting should you choose to gear up in the future.

⭕ There is only one ‘wrong’ choice: to wait and do nothing at all.

The mega trend is a fact, and unless you choose to ignore the challenges of the future (already in motion), you need to get started – one way or the other.

If you wait, you will find yourself in the exact same position in two years, and chances are you will be way behind your competitors, and again struggling for time.

If you decide not to prepare, you are signaling to the market that you do not care about making sustainable business choices, or that you do not value transparency on these issues.  Either way, it will not be good for business.

⭕ Read more

👇 You can read more about a leading group that use ESRS to X-Ray and future-proof their business here >>>

And if you want to use our digital ESRS and VSME templates with built-in guidance 👉 you are welcome to contact us

#getCSRDready, #CSRD, #ESRS, #VSME