VSME changed in September 2026 when the EU’s new voluntary sustainability reporting standard entered into force. The change does not introduce a new mandatory reporting obligation for SMEs, but it changes the structure of voluntary reporting and strengthens its role as a common framework for sustainability information exchanged within value chains. The new standard is based on the previous VSME standard, which many SMEs have already become familiar with. However, this is not merely a change of name.
What happened to VSME?
Commission Delegated Regulation (EU) 2026/1560 was published on 21 September 2026 and entered into force on 24 September 2026. The Regulation established a voluntary sustainability reporting standard for companies that are not subject to mandatory sustainability reporting under the CSRD. The standard can be used by companies with up to 1,000 employees.
At the same time, the previous VSME framework has been updated to reflect the EU’s revised sustainability reporting regulation. For SMEs, however, the most important point remains unchanged: reporting under the standard is voluntary.
Basic and Comprehensive remain
The two-tier structure already familiar from VSME remains in place. The Basic Module forms the foundation of the reporting framework and contains the B1–B11 disclosures. It is designed particularly for micro-enterprises and also serves as the reporting foundation for other companies using the standard. The Comprehensive Module supplements the Basic disclosures when, for example, customers, lenders or investors require more extensive sustainability information about the company. The idea is still not to create a burdensome reporting system for every small company.
The Value Chain Cap is a significant change for SMEs
One of the most important elements of the new regulatory framework is the value chain cap. Its purpose is to limit the amount of sustainability information that a company subject to the CSRD can require, for the purposes of its own sustainability reporting, from companies in its value chain with up to 1,000 employees. The value chain cap applies to financial years beginning on or after 1 January 2027. This may reduce the number of differing reporting information requests received by SMEs.
At the same time, it is important to understand what the value chain cap does not mean. It does not eliminate all sustainability requirements from customers. Companies may still be asked to provide information based on other legislation, procurement criteria, contractual terms, supplier requirements or other business needs.
SMEs should not start with the report
The new standard provides a clearer common framework for sustainability information. However, it does not change one fundamental principle of sustainability work: reporting is not the same as sustainability work. A company should first assess the current state of its sustainability work, identify which sustainability topics are material to its business, determine what customers and other stakeholders need, and decide what the company should develop in practice. Targets, actions and indicators can then be defined. Once this groundwork has been completed, producing sustainability information in accordance with the standard becomes considerably easier.
What does the new standard mean for your company?
We have brought together the key aspects of the new standard on one page: who the standard is intended for, how the Basic and Comprehensive Modules work, what the value chain cap means, and how SMEs should approach collecting sustainability information in practice.
Read more: Voluntary Sustainability Reporting Standard for SMEs
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