Out of Scope for CSRD? Not really!
Meet the VSME That Banks, Investors—and Now the Commission—Are Expecting You to Use. (by Madiha Mouchtak MBA)
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1. Why VSME Matters
On 30 July 2025, the European Commission issued a Recommendation endorsing the Voluntary Sustainability Reporting Standard for non‑listed SMEs (VSME). Developed by EFRAG and delivered in December 2024, the VSME provides a simplified, modular ESG reporting framework ideally suited for businesses that are now outside CSRD scope (companies with fewer than 1,000 employees, including SMEs).
Strategic Timing: The Omnibus I simplification raised CSRD thresholds to cover only larger companies, potentially excluding up to 80% of firms. VSME fills the resulting voluntary reporting gap.
Defined "Value‑Chain Cap": The Commission recommends that banks, investors, and corporates limit their ESG data requests to what’s covered by VSME—protecting SMEs from uncoordinated, excessive demands.
Digital Support Ready: EFRAG has released Excel templates, XBRL taxonomy, converters, and multilingual guides to facilitate adoption.
2. Development Journey & Stakeholder Input
December 2024: EFRAG submitted the final VSME standard to the Commission following approvals in October and November.
Earlier 2024: A public consultation (Jan–May) and a workshop with banks and SMEs (Sep) informed module design and the decision to integrate key datapoints into the main framework.
3. What Banks & Investors Requested—And Where It Landed
Here’s how stakeholder feedback translated into the final VSME structure:
A September 2024 workshop confirmed these four datapoints were truly essential, prompting their integration and the elimination of a separate “AFI Module”
During a September 2024 workshop, banking associations confirmed that four datapoints were essential—radioactive waste, female-to-male management ratio, exclusion from EU benchmarks, and GHG intensity. These were built directly into VSME’s modules; other suggestions were dropped, and the AFI module was eliminated entirely.
4. VSME Modules at a Glance
5. Why This Matters for Businesses out of scope
The VSME framework offers:
A proportionate and credible approach to ESG reporting
Validated alignment with stakeholder expectations
Modular scalability—start simple, grow as needed
Tool-assisted deployment, from templates to converters
A future-ready path toward potential delegated acts on voluntary standards
6. Your Next step
Out of CSRD scope? The VSME is your credible ESG framework—voluntary, endorsed, modular, tool-backed, and aligned with stakeholder needs.
Ready to implement it with confidence? Reach out today:
📩 Send me a message via LinkedIn or visit 🌐 answerinside.eu to explore how we can work together.
We’re here to support your adoption of the VSME every step of the way.
In Short:
Even if you’re out of CSRD scope, VSME is your Commission-backed, modular, tool-enabled ESG standard: simple, strategic, and stakeholder-aligned.
Need guidance? Just reach out. LinkedIn