EFRAG submits VSME to European Commission

On 17 December 2024, EFRAG submitted the VSME (Voluntary ESRS for Small and Medium-sized Enterprises) to the European Commission. EFRAG will publish a series of support material and organise public events in 2025 to support the application of the VSME.

The VSME is a voluntary reporting standard for small and medium-sized enterprises (SMEs) that do not fall within the scope of the CSRD (Corporate Sustainability Reporting Directive, Directive (EU) 2022/2464), which amended the EU Accounting Directive (Directive 2013/34/EU). The standard is based on the European Commission’s SME relief package of September 2023 (Communication COM(2023) 535 final).

The voluntary application of the VSME is an option for numerous SMEs that already have to provide sustainability information to banks or large corporate clients, for example, in the context of obtaining bank finance or entering into supply relationships . EFRAG’s objective is for the VSME to become the market standard for these information requirements in future in order to simplify and standardise questionnaires and reduce bureaucracy for SMEs.

As the VSME is a voluntary reporting standard, unlike the ESRS (European Sustainability Reporting Standards) it will not be issued as a delegated act by the European Commission and has so far only been published in English. It is currently uncertain whether the VSME will be published in all official EU languages in the Official Journal of the EU in the future, for example, as a communication from the European Commission. The DRSC and the Austrian Financial Reporting Advisory Committee (AFRAC) are currenstly systematically collecting the translated technical terms (English-German) in ESRS Set 1 (Delegated Regulation (EU) 2023/2772) as part of their joint project group work. This project is intended to form the basis for later support in the translation of the VSME.

The exposure draft VSME was published for public consultation, together with the draft LSME, in January 2024. At the same time, EFRAG launched field tests to get these drafts reviewed by SMEs and users with regard to the applicability, appropriateness and completeness of the requirements. The DRSC participated in the field tests, which ran until 21 April 2024. The findings from these consultations informed the DRSC comment letter on the exposure drafts.