Voluntary ESG Reporting Standard: A Tailor-made Solution For SMEs

In recent years, the European Commission's focus on transparency in environmental, social, and governance matters has increased significantly. With Directive (EU) 2022/2464 (CSRD), the Commission introduced and updated corporate sustainability reporting obligations for large-sized enterprises and listed companies.

In this context, both financial institutions and parent companies often request sustainability-related information from SMEs, even though these entities are not, in themselves, subject to mandatory reporting requirements.

Therefore, with the aim of developing a coherent framework enabling SMEs to communicate ESG information, on 30 July 2025 the European Commission adopted Recommendation (C(2025) 4984), introducing a voluntary sustainability reporting standard targeted at SMEs and micro-enterprises, referred to as the VSME (Voluntary Sustainability Reporting Standard for Micro and Small Enterprises), structured into two modules.