Implement VSME with Ease – and Expand It Intelligently

VSME (Voluntary Sustainability Reporting Standard for non-listed Micro-, Small- and Medium-sized Enterprises) is a voluntary reporting framework for small and medium-sized enterprises (SMEs) that wish to document their sustainability performance in a structured and comparable manner – without the bureaucratic burden of the Corporate Sustainability Reporting Directive (CSRD). It was developed by the European Financial Reporting Advisory Group (EFRAG) on behalf of the European Commission.

VSME is specifically tailored to the needs of SMEs and is based on the core principles of the CSRD – but in a significantly simplified and more practical form.

The framework consists of a basic module with eleven ESG disclosures and an optional comprehensive module covering nine additional thematic areas. This structure offers a balanced level of transparency without overwhelming smaller companies.

When combined with a modern VSME software solution like leadity, VSME can be implemented with maximum efficiency. In addition, leadity supports companies in further developing their VSME reporting through its exclusive expansion concept, VSME Plus. This allows businesses to incorporate industry-specific ESG topics and position themselves strategically for the future.

VSME is aimed at small and medium-sized enterprises (SMEs) that are currently not subject to the legal ESG reporting requirements under the CSRD – yet still face increasing demands from customers, banks, ESG ratings, or public tenders.

VSME is particularly relevant for companies that:

• want to proactively prepare for future regulations
• need to efficiently meet ESG requirements from supply chains
• are seeking grants or improved financing conditions
• aim to make their sustainability performance visible – even without a legal obligation

The implementation is particularly efficient with VSME software such as leadity. Here, the entire VSME, including all mandatory and supplementary information, is digitally mapped. Companies can start precisely with what they need – and flexibly expand their VSME reporting with VSME plus. This makes leadity the ideal solution for SMEs that not only want to report but also aim to strategically use sustainability as a competitive advantage.

VSME offers small and medium-sized enterprises a clear and structured way to transparently document their sustainability performance – without the complexity of CSRD.

With only around 140 data points, VSME is significantly more streamlined than the ESRS standards under CSRD, which may require up to 1,200 disclosures. At the same time, VSME aligns with regulatory expectations, ensuring compatibility with stakeholders, banks, and ESG ratings.

Key benefits of VSME include:

• Modular structure: Companies can choose between a basic and a comprehensive module
• Low administrative burden: No mandatory external assurance, no extensive consulting required
• Improved access to finance: Transparent ESG reporting strengthens positioning with banks, investors, and in public tenders

With a specialized VSME software like leadity, implementation becomes especially efficient. The platform not only covers the full content of VSME but also extends it with VSME Plus – adding relevant topics such as supply chains, climate risks, or industry-specific ESG aspects. This enables companies to build ESG reporting that is credible, future-ready, and grounded in practice.

VSME covers, at least at a basic level, the key topics of ESG reporting – that is, Environmental, Social, and Governance aspects.

The basic module includes eleven standardized disclosure topics, such as energy consumption, employee structure, diversity, working conditions, and governance. The comprehensive module adds nine further areas, including Scope 3 emissions, climate risks, and human rights due diligence.

In total, VSME consists of around 140 structured data points – divided into qualitative text fields, yes/no questions, measures, targets, and simple key performance indicators (KPIs).

With a professional VSME software like leadity, this information can be collected and structured digitally and automatically compiled into a complete VSME report. In addition, VSME Plus enables the inclusion of industry-specific ESG topics – for example, to meet requirements in tenders, ESG ratings, or stakeholder communications. This transforms a voluntary reporting framework into an effective management tool for sustainable business practices.

A basic VSME report can, in principle, be created using Excel – especially for small companies that only intend to use the basic module. For a one-time, surface-level VSME report or an initial data collection, Excel may offer a pragmatic solution.

In practice, however, VSME reporting in Excel quickly reaches its limits. Although VSME is intentionally streamlined, the roughly 140 data points from both the basic and comprehensive modules still represent a substantial volume of ESG information, measures, and documentation that must be managed in a structured way. Manual data entry, lack of automation, unclear role allocation, and a high potential for errors make long-term reporting in Excel cumbersome, inefficient, and difficult to oversee.

Companies looking to regularly update their VSME reporting, manage it across multiple locations, or expand it with strategic ESG topics will benefit significantly from a dedicated VSME software like leadity. After all, sustainable business practices don’t end with filling out a spreadsheet. Especially for companies that want to communicate their ESG performance in a credible, industry-specific, and future-ready way, an Excel file isn’t suffice. With leadity, VSME reporting becomes part of a holistic sustainability strategy: VSME Plus enables companies to go beyond the standard requirements and focus on the ESG topics that truly matter for their industry, customers, and stakeholders. This turns a streamlined reporting standard into a strategic management tool – enabling sustainability with structure and impact.