Large Companies Now Have a Place in the VSME (VS)

The updated VSME (now known as VS) now covers companies with up to 1,000 employees. Here is what that means for companies that fell out of CSRD scope, and why it's still worth reporting.

During the last few years, many companies with between 250 and 1,000 employees have been stuck in the middle, unsure of what to report and what they owed stakeholders and regulators. They were first expected to report under the CSRD, then saw that requirement postponed, and finally removed by the Omnibus changes earlier this year. At the same time, they were too large for the VSME, which was written for SMEs with fewer than 250 employees.

That is now changing. The updated VSME , which applies from 24 September, covers companies with up to 1,000 employees. It gives this group a clear framework to report against, and legal protection when larger customers ask for sustainability data.

Why it's still worth doing

On paper, these companies have far less to report than the CSRD would have required, and using the VSME is completely voluntary. Still, there are good reasons to build it into your operations and your annual reporting routine:

• Banks, investors and larger customers already ask companies of this size for sustainability data. Working with the VSME gives you one structured set of answers instead of starting from scratch with every new questionnaire.

• It helps you set up the systems to measure and follow up on your performance over time. Once these routines are part of the organisation, they grow with you, which makes the step much easier if you eventually pass the CSRD thresholds of 1,000 employees and €450 million in turnover.

• Larger companies have a larger impact and carbon footprint than smaller ones. Customers and the wider community alike often expect companies of this size to report on it. Doing so shows that you take it seriously, and makes your sustainability work easier to trust.

The VSME gives you room to report in a way that fits your resources and size. That flexibility shouldn't be read as permission to do the bare minimum, and we highly encourage going beyond basic requirements where you can.

What the VSME covers for companies your size

The VSME is made up of two parts, a Basic Module and a Comprehensive Module.

The Basic Module is the groundwork. It starts with information about your company, such as its size, sites and operations, and then covers energy use, scope 1 and 2 emissions, biodiversity, water, circular economy, resource use and waste. It also includes information about your workforce, such as number of employees, workplace accidents, pay, collective agreements and training, as well as any convictions or fines for corruption. Some disclosures only apply if they are relevant to your operations, for example pollution if you already report pollutants to authorities, or biodiversity if you have sites in or near sensitive areas. Together, it gives a snapshot of what your business looks like today.

The Comprehensive Module builds on top of the Basic Module and asks for more, but it is still much narrower than the CSRD, and a lot of it covers things a company of your size is likely to have in place already. Where the Basic Module looks at where you are today, the Comprehensive Module looks ahead. It involves fewer reporting data points and more strategy and planning, such as setting emission reduction targets and the actions to reach them, describing a climate transition plan, looking at climate-related risks and describing your approach to human rights. You can also choose to include scope 3 emissions from your value chain.

This forward-looking information is often what external partners most want to see, since it shows how you plan to grow, manage risks and improve your operations. Having it documented means you can answer from work you have already done, instead of treating each request as extra reporting.

It also helps to know where the limits are. Larger customers reporting under the CSRD can require information that falls within the value chain cap. If they ask for more, they must say which data points fall outside it, and you have the right to decline. Banks and investors are also encouraged to keep their requests within the standard.

Where to start

If your company started preparing for the CSRD before the Omnibus changes, that work still counts. Data you have collected, policies you have written and analyses you have done can be moved over to the VSME.

If you are starting from scratch, the Basic Module is a manageable first step. Most of the information, such as energy and water use and HR figures, already exists somewhere in the organisation. Once that is in place, you can add the parts of the Comprehensive Module that matter most to your customers and your business.

Timing matters too. The value chain cap applies from financial years starting on or after 1 January 2027, which for most companies means the next financial year, so now is a good time to get started.

Sources: EFRAG, Voluntary Sustainability Reporting Standard for non-listed SMEs (VSME), published December 2024. // European Parliament and Council, Directive (EU) 2025/794 postponing the application dates of certain corporate sustainability reporting requirements, adopted April 2025. // European Parliament and Council, Directive (EU) 2026/470 amending the sustainability reporting framework and introducing the value chain cap, adopted February 2026. // European Commission, Commission Delegated Regulation (EU) 2026/1560 establishing sustainability reporting standards for voluntary use by undertakings protected by the value chain cap, published in the Official Journal 21 September 2026. // EFRAG Knowledge Hub, Voluntary Standard, 2026 Delegated Act version.