VSME reporting changed significantly when the European Commission adopted a delegated regulation on 3 July 2026 that elevates the voluntary sustainability reporting standard for SMEs (VSME) to an entirely new position. The decision is part of the Omnibus I reform, which aims to reduce the administrative burden on companies and improve the competitiveness of the European Union.
For SMEs, the decision changes in practice what kind of sustainability information large customers can request from their suppliers and how SMEs can respond to these information requests.
A statutory "Value Chain Cap" protects small companies
The most significant change is that the VSME standard becomes the official Value Chain Cap. Previously, large companies subject to CSRD reporting obligations could request highly diverse and extensive sustainability information from their suppliers in order to fulfil their own reporting obligations.
Under the new regulation, large companies may not require SMEs in their value chain to provide more information than is defined by the VSME standard. In practice, an SME has the right to rely on this limitation.
Relief for micro-enterprises
The new decision takes particular account of the limited resources of the smallest companies. A new principle of proportionality has been introduced into the standard, according to which many data points that were previously mandatory are now voluntary for companies with no more than 10 employees.
For micro-enterprises, the following reporting information has become voluntary, among other things:
- Detailed energy consumption and greenhouse gas emissions (Scope 1 and 2).
- Water withdrawal and water consumption.
- The application of circular economy principles and the precise weight of waste.
These simplifications seek to ensure that reporting does not become an overwhelming obstacle for the smallest operators while still providing a framework for those that wish to communicate their sustainability performance more extensively.
Harmonisation makes reporting easier
The VSME standard has been amended so that it is fully aligned with the updated and simplified ESRS standards. This means that if a company grows and later becomes subject to mandatory reporting, information collected in accordance with the VSME standard can be used directly. At the same time, the number of reportable data points has been reduced compared with the original drafts.
In my opinion, however, the most significant impact of these changes is not the reduction of reporting requirements, but the fact that SMEs now have, for the first time, a genuinely practical and clear common standard that they can rely on as customer information requests increase.
Practical impacts: How will sustainability work change?
Reporting becomes more predictable. An SME no longer has to fear different questionnaires from every large customer. Once the information has been compiled in accordance with the VSME standard, the company has a ready-made "information package" that is acceptable to all customers and financiers subject to CSRD obligations.
Support from banks and investors is strengthening. Banks and other financiers are also increasingly using VSME-based information to support lending decisions and sustainability assessments. Compliance with the standard can significantly facilitate access to financing and improve loan terms.
Sustainability will become a competitive advantage, not just an obligation.
Sustainability will become a competitive advantage, not just an obligation. Although reporting is voluntary, its importance is increasing in competitive tenders and public procurement. VSME provides a cost-effective and clear model for this without expensive assurance requirements.
What next?
The new standard will apply to mandatory value chain reporting by large companies from the 2027 financial year onwards, but it is available for voluntary use immediately.
So how should companies get started in practice? I recommend first carrying out an inventory of the company's existing data: compare the data you already have with the requirements of the VSME standard. This will immediately show which information is already available (such as electricity bills or employee numbers) and which data still needs to be collected.
Do not try to do everything at once. Instead, start with the Basic Module. It is the lightest level of the standard and has been designed specifically as the first step in reporting for small companies. The Basic Module forms the foundation of your company's sustainability reporting because it includes only the most essential information:
- Environment: how much energy your company consumes and what its estimated emissions are.
- Workforce: basic information on employees, occupational safety and training.
- Governance: the company's official information and common rules, such as anti-bribery measures.
Once this foundation is in place, your company will have a ready-made information package that meets the basic requirements of most customers and banks. You can expand the reporting later if your company grows or if stakeholders request more detailed information.
The VSME standard is becoming a common language through which SMEs can respond to sustainability information requests from customers, financiers and other stakeholders. The earlier a company adopts the standard, the easier it will be to collect and use sustainability information in the future.
VSME is above all a management tool
VSME is above all a management tool
For SMEs, VSME is above all a management tool, not merely a reporting framework. Käkikuu helps SMEs implement the VSME standard in practice. The work can be started, for example, with the Sustainability Compass, which enables a company to quickly gain an overall picture of its current situation and development needs, while also providing the capability to respond to sustainability information requests from customers and financiers.
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