The VSME is the European Union’s voluntary sustainability reporting standard for companies outside mandatory CSRD scope. Developed by EFRAG, it offers a simplified set of ESG disclosures in two tiers — a Basic Module and a Comprehensive Module — and defines the ceiling on what CSRD-reporting companies can require their smaller suppliers to provide.
Why It Matters for Manufacturers
When the EU narrowed CSRD, most mid-size manufacturers fell out of mandatory scope — and VSME is the standard they landed on.
VSME plays two roles. First, it is the format customer data requests are converging on. Under the value chain cap, a CSRD-reporting customer cannot demand sustainability information beyond the voluntary standard from suppliers with 1,000 or fewer employees, which makes VSME both a shield against 400-question questionnaires and the floor a supplier should be able to answer. Second, it is a proportionate way to report voluntarily. Indeed, banks and lenders increasingly reference it in financing criteria.
The burden is deliberately lighter than ESRS: no double materiality assessment, no mandatory external assurance, and disclosures apply only where relevant to the company’s circumstances.
U.S. and EU Applicability
VSME is an EU standard, but it reaches U.S. manufacturers the same way ESRS data requests do: through EU customers in CSRD scope. A U.S. supplier that can answer a VSME-shaped request once has a reusable response for every EU customer that asks. There is no U.S. equivalent standard.
Current Status
Last updated: July 2026
- The European Commission endorsed the VSME by recommendation on July 30, 2025, and on July 3, 2026, adopted a voluntary reporting standard based on it as a delegated act, in the same package as the revised ESRS. The act is now in a parliamentary scrutiny period.
- The value chain cap applies from financial year 2027: CSRD-reporting companies cannot require suppliers with 1,000 or fewer employees to provide sustainability information beyond the voluntary standard.
- EFRAG provides a free digital template and XBRL taxonomy for machine-readable VSME reports.