SMEs Sustainability Reporting [ VSME ]
Sustainability Reporting involves organisations disclosing Environmental, Social, and Governance · ESG impacts.
In the EU, there are two main Reporting Standards:
1) The European Sustainability Reporting Standard · ESRS is a Mandatory Framework under the Corporate Sustainability Reporting Directive · CSRD
2) The Voluntary Sustainability Reporting Standard · VSME is a Voluntary Framework for non-listed SMEs by the European Financial Reporting Advisory Group · EFRAG
VSME and ESRS are interconnected, allowing Micro-, Small-, and Medium-Sized Enterprises · SMEs to align their voluntary efforts with broader EU regulatory standards.
VSME prepares SMEs to go beyond compliance, mapping Risks and Opportunities to remain competitive by improving transparency about their Sustainability performance and incorporating ESG strategies into their business operations; thereby enhance credibility.
Two-Module SME-friendly Approach:
Basic Module (11 disclosures)
To be completed to use the Comprehensive Module
Comprehensive Module (9 disclosures)
Intended for receiving sustainability information requests from business partners such as Financial Institutions, Corporate Clients, Lenders & Investors
Key Benefits:
Flexible: SMEs can choose a module that fits their capabilities and stakeholder needs
Scalable: Allows SMEs to start with basic reporting and expand when ready
EFRAG VSME Scope:
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B1 – Basis for Preparation
B2 – Sustainability Practices, Policies, and Future Initiatives
C1 – Business Model & Strategy
C2 – Extended Sustainability Practices & Policies
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B3 – Energy Consumption & Greenhouse Gas (GHG) Emissions
B4 – Pollutant Emissions
B5 – Biodiversity Impact
B6 – Water Withdrawal & Consumption
B7 – Resource Management & Circular Economy
C3 – GHG Reduction Targets & Climate Transition Plans
C4 – Climate-related Risks & Timeframes
Scope 3 GHG Emissions
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B8 – Workforce Characteristics
B9 – Health & Safety
B10 – Employee Rights & Development
C5 – Extended Workforce Characteristics
C6 – Human Rights Policies & Processes
C7 – Severe Human Rights Incidents & Actions Taken
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B11 – Corruption & Bribery Convictions
C8 – Sector Revenues & Exclusions from EU Benchmarks
C9 – Governance Body Gender Diversity
As a result of the Omnibus Package Proposal 2025, if approved, all companies below ≤ 1,000 employees, and net turnover < €50 million or a balance sheet total < €25 million would fall under the VSME Standard to report their ESG & Sustainability performance.
Tiaki helps Real Estate organisations with climate ambition in preparing to report using the EFRAG VSME Standard.
Key Objectives:
Improve ESG & Sustainability Management
Meet Data Requests from Larger Businesses
Gain access to Green Financing
Contribution towards a sustainable and inclusive Economy transition
Provide transparency, take Corporate Responsibility
The “If Applicable” VSME principle replaces the Double Materiality Assessment meaning:
Data only needs to be disclosed if it is relevant to the company's operations
Reduces reporting burden and costs for SMEs