The VSME: a simple ESG report for UK small businesses with EU customers
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If you sell to companies in the EU, you may be asked for sustainability data in a format called the VSME, the Voluntary Sustainability Reporting Standard for SMEs.
It was designed for exactly your situation: a smaller business that isn't required to report by law, but keeps getting asked for ESG data by bigger customers, banks and investors. This guide explains what it is and how to use it.
The short version
- The VSME is a voluntary, short ESG report format for smaller businesses, developed for the EU by EFRAG.
- It has a Basic Module and an optional Comprehensive Module.
- Larger EU companies that report under the EU's rules are encouraged not to ask smaller suppliers for more than the VSME covers, which makes it a sensible format to answer with.
What the VSME is
The VSME was developed by EFRAG, the body that writes the EU's sustainability reporting standards. In July 2025 the European Commission recommended it as the voluntary standard for smaller businesses.
Large EU companies have to report on their supply chains, so they ask suppliers for data. Without a common format, every customer asked different questions. The VSME gives everyone one short, recognised format instead.
Why UK businesses should care
- EU customers may ask for it. If you supply European companies, their sustainability teams may send you a VSME-based questionnaire.
- It sets a sensible limit. Under the EU's simplified rules, large companies in scope are expected not to demand more from smaller suppliers than the VSME covers. Answering in VSME format helps keep requests proportionate.
- It's a good checklist anyway. Even if nobody asks, it's a clear, ready-made structure for your first ESG report.
The two modules
| Module | Who it's for | What it covers (in short) |
|---|---|---|
| Basic Module | Every business using the VSME, including micro-businesses | General information, policies and practices, energy use and Scope 1 & 2 emissions, pollution, biodiversity, water, resource use and waste, your workforce (headcount, health & safety, pay), and anti-corruption |
| Comprehensive Module | Businesses whose banks, investors or customers want more | Adds things like climate targets and transition plans, climate risks, human rights in your value chain, and more detail on your workforce and governance |
You report on an "if applicable" basis, so you skip what doesn't apply to your business. It doesn't require the full "double materiality" assessment that large companies do, or an external audit.
How to start a VSME report
- Download the standard from EFRAG's website (linked below). It comes with guidance and templates.
- Start with the Basic Module. Only do the Comprehensive Module if someone asks for it.
- Gather your energy and fuel data and calculate your Scope 1 & 2 emissions. That's usually the hardest part.
- Collect your workforce data: headcount, health & safety incidents, and pay information.
- Write down your policies: a sustainability policy, anti-bribery and others you have.
- Answer honestly and leave out what doesn't apply.
Granular's free check covers much of the same ground (energy, waste, water, people and governance) and builds an action plan for the gaps.
See exactly what applies to your business
Answer plain-English questions about your business and get the rules that apply, a tailored action plan and a carbon tracker. Free, no account needed.
Take the free check →Frequently asked questions
Is the VSME mandatory for UK businesses?
No. The VSME is a voluntary EU standard. UK businesses may choose to use it, especially if EU customers, banks or investors ask for sustainability data.
What's the difference between the VSME and the CSRD?
The CSRD is the EU law requiring large companies to publish detailed sustainability reports. The VSME is a much shorter, voluntary standard designed for smaller businesses that aren't covered by the CSRD.
Do I need the Comprehensive Module?
Only if a bank, investor or customer asks for it. Most smaller businesses start with the Basic Module.
Found this useful? Pass it on to someone who's been asked the same question.
Official sources
- EFRAG — Voluntary Sustainability Reporting Standard for SMEs (VSME) (opens in a new tab)
- European Commission — Corporate sustainability reporting (CSRD) (opens in a new tab)
This guide is educational and not legal advice. Thresholds are simplified and rules change, so always confirm with the official source or an adviser.
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