If you've started looking into CSRD compliance for your SMB, you've likely encountered the acronym ESRS VSME. It appears in almost every guide, checklist, and consultant proposal — but it's rarely explained clearly.
This guide covers exactly what ESRS VSME is, which businesses should use it, what it actually requires you to disclose, and how to produce a compliant report without engaging a consultant.
What Is ESRS VSME?
ESRS stands for European Sustainability Reporting Standards — the family of standards published by the European Financial Reporting Advisory Group (EFRAG) that define howcompanies report sustainability information under the EU's Corporate Sustainability Reporting Directive (CSRD).
VSME stands for Voluntary SMB Standard — a simplified, proportionate set of disclosures designed specifically for small and medium-sized businesses. It was published by EFRAG in January 2024.
The full ESRS standards for large listed companies run to hundreds of pages across 12 topic-specific standards (climate, biodiversity, workforce, governance, etc.). The VSME condenses this into a single, shorter standard with two modules:
- Module A — Core disclosures that every VSME reporter should provide
- Module B — Additional topic-specific disclosures, selected based on what is material to your business
Who Should Use ESRS VSME?
ESRS VSME is designed for businesses that are not directly subject to mandatory CSRD reporting but need to provide sustainability information because:
- You are a supplier to a large company. From 2024, large EU companies must report their Scope 3 emissions — which include the emissions of their suppliers. They will ask you to provide your data using the VSME framework.
- You are approaching the CSRD threshold. From 2026, SMBs with more than 250 employees, or those listed on EU regulated markets, come into scope for mandatory CSRD reporting. Using the VSME now prepares you.
- You need ESG data for financing. Banks and investment funds increasingly require ESG documentation as part of green loan applications, ESG-linked credit facilities, or impact investment rounds.
- You want to make credible sustainability claims. Under the EU Green Claims Directive, environmental claims require substantiation. A VSME-aligned report provides that foundation.
You do not need to be subject to mandatory CSRD to use ESRS VSME. Any EU SMB can use it voluntarily to produce a credible, standardised sustainability report.
Module A: The Core Disclosures
Module A covers the baseline information every VSME report should include. Think of it as the minimum viable sustainability report.
Governance
Who in your organisation is responsible for sustainability? This disclosure requires you to name the role (not necessarily the individual) that oversees sustainability strategy — typically the CEO, CFO, or an appointed sustainability manager. For most SMBs, this is one or two sentences.
Strategy and Material Impacts
A brief description of how your business affects — and is affected by — sustainability matters. For most SMBs, this section covers your most significant emission sources (energy, transport, waste) and any climate-related risks to your operations (e.g., energy cost volatility, supply chain disruption).
GHG Emissions — The Most Important Section
Module A requires disclosure of your greenhouse gas emissions across all three scopes:
- Scope 1 — Direct emissions from sources you own or control: natural gas boilers, heating oil, company vehicles, industrial processes.
- Scope 2— Indirect emissions from purchased electricity and heat. The VSME requires location-based reporting (using your country's grid emission factor) and recommends market-based reporting where available.
- Scope 3 — Value chain emissions. At VSME level, you are required to disclose Scope 3 where it is material. For most SMBs, the relevant Scope 3 categories are business travel (Category 6), employee commuting (Category 7), and waste (Category 5).
All emissions must be expressed in tonnes of CO₂ equivalent (tCO₂e)and the emission factors used must be cited. DEFRA 2024 is the most widely accepted set of emission factors for EU SMBs.
Energy Consumption
Total energy consumption in MWh, split between renewable and non-renewable sources. Your electricity and gas bills provide this data directly. Most SMBs can complete this from 12 months of utility bills in under 30 minutes.
Workforce Practices
Basic headcount, employment type (permanent vs. fixed-term), gender distribution, and any material workforce incidents. For businesses below 50 employees, this section is brief and straightforward.
Business Conduct
A statement on your approach to anti-bribery and corruption, data protection (GDPR compliance), and responsible supply chain practices. Most businesses can reference existing policies here.
Module B: Topic-Specific Optional Disclosures
Module B covers additional topics that may or may not be material to your business. You only include the sections relevant to your operations.
B11 — Climate Change Mitigation
For businesses with a climate transition plan, targets, or carbon offset programme. If you have committed to net zero by a specific year, this is where you document the target, base year, and progress. Optional for businesses without formal targets.
B12 — Pollution
Relevant for manufacturing, chemical, or agricultural businesses that discharge pollutants into air, water, or soil. Service businesses typically skip this section.
B13 — Water
Required for water-intensive operations (food production, agriculture, beverage manufacturing). For most office-based SMBs, water use is not material and this section is omitted.
B14 — Biodiversity
Site-specific impacts on ecosystems. Relevant for businesses with land use, quarrying, or operations in ecologically sensitive areas. The majority of urban SMBs can omit this.
B16 — Workers in the Value Chain
Supplier and contractor labour practices. Relevant for businesses that source from regions with higher labour risk, or that rely heavily on subcontractors and gig workers.
What a VSME-Aligned Report Actually Looks Like
A complete ESRS VSME report for a typical EU SMB (50–200 employees, office-based or light manufacturing) typically includes:
- A cover page with company name, reporting period, and registered address
- A governance statement (1 paragraph)
- Scope 1, 2, and 3 emissions table in tCO₂e, with data sources and emission factors cited
- Total energy consumption in MWh
- Workforce headcount summary
- Business conduct statement
- A methodology note referencing DEFRA 2024 and GHG Protocol Corporate Standard
For a typical SMB, this amounts to 4–8 pages of structured disclosure — far less daunting than the full ESRS standards, which run to 400+ pages for large companies.
How to Generate a VSME-Aligned Report for Free
The most time-consuming part of VSME reporting is the GHG emissions calculation. Once you have your Scope 1, 2, and 3 figures, assembling the rest of the report is relatively straightforward.
EmissionPlan's free calculator covers all three scopes with DEFRA 2024 emission factors applied automatically — including country-specific electricity grid intensity for 13 EU countries. No sign-up required.
When you create a free account, your results are saved and you can generate a professionally formatted PDF report that includes:
- Scope 1, 2, and 3 breakdown in tCO₂e
- DEFRA 2024 emission factors cited for every calculation
- GHG Protocol Corporate Standard and ESRS VSME alignment notes
- Methodology and data provenance section
- Company name, reporting period, and generated date
The generated PDF covers the core GHG section of ESRS VSME Module A — the disclosure that is almost always the primary requirement when a customer or lender asks for your sustainability report.
Key Dates to Know
- January 2024: ESRS VSME published by EFRAG
- Financial year 2024 reporting: Large companies (500+ employees) file first CSRD reports, triggering Scope 3 supplier data requests to SMBs
- Financial year 2025 reporting: Large companies (250+ employees, €40M+ revenue) enter CSRD scope — widening the pool of companies sending supplier questionnaires
- Financial year 2026 reporting: Listed SMBs and companies meeting SMB thresholds may be in scope for mandatory CSRD using ESRS VSME
The Bottom Line
ESRS VSME is not as complex as it sounds. For most EU SMBs, the practical requirement is: measure your GHG emissions across Scope 1, 2, and 3; document your energy use; add a brief governance statement; and present it in a professional format.
The hardest part — the GHG calculation — takes under 5 minutes with the right tool. Start with the EmissionPlan free calculator to get your emissions baseline, then generate your VSME-aligned PDF report in one click.