Your customer wants a VSME report. Now what?

A large customer wants your sustainability data in the VSME format, and the deadline is weeks away. Here is what the standard is, what it asks for and what the customer can actually demand.

VSME, VS: what is it?

VSME is a voluntary sustainability reporting standard that EFRAG developed for small and medium-sized companies. The European Commission recommended it in July 2025.

On 3 July 2026 the Commission adopted a delegated regulation that turns it into the EU Voluntary Standard, often shortened to VS. Published in the Official Journal on 21 September 2026, it enters into force on 24 September. The content is VSME with minor tweaks, so both names are in use.

Companies with up to 1,000 employees and no reporting obligation can use it. Voluntary means no law makes you report. In practice, your customer decides how voluntary it is.

Why large customers ask for it

The Omnibus I directive, in force since 18 March 2026, narrowed the EU sustainability reporting directive (CSRD). From financial year 2027 only companies with more than 1,000 employees and over 450 million euros in turnover must report. The Commission's proposal estimated 80 % fewer companies in scope. The final thresholds are stricter, and estimates are now around 90 %.

Those that remain must report on their value chain, including suppliers' emissions and working conditions. The easy way is to ask every supplier for the same format. Banks ask too, for their own reporting and lending.

Norway has proposed matching thresholds, over 1,000 full-time equivalents and over 5 billion kroner in revenue, in Prop. 106 L (2025–2026). The ministry expects 120 to 160 Norwegian companies in scope from 2027.

What the basic module covers

The standard has two modules. The basic module is the minimum. The comprehensive module adds what banks, investors and large customers often want on top, such as climate targets, climate risk and human rights. The basic module has eleven disclosures:

  • Basis for preparation, plus your policies and initiatives for the transition (B1 and B2)
  • Energy use in MWh and greenhouse gas emissions for scope 1 and 2 (B3)
  • Pollution to air, water and soil, biodiversity, water, resource use and waste (B4 to B7)
  • Workforce: headcount, health and safety, pay, collective agreements and training (B8 to B10)
  • Convictions and fines for corruption and bribery (B11)

The value chain cap: what customers can demand

For financial years starting on or after 1 January 2027, a value chain cap applies. Companies that must report cannot require more information for their sustainability report from suppliers with 1,000 employees or fewer than the standard sets out. The exact datapoints are listed in an annex to the regulation.

A customer asking for more must tell you what exceeds the cap and that you may decline. The cap does not override contracts, other laws or information commonly shared in your sector. Banks are not bound, only encouraged to stay within the standard.

For Norwegian customers, the cap comes through Norwegian law, which is still a proposal. Check the status before you cite it in a negotiation.

What you need to do

The steps are less dramatic than the deadline suggests:

  • Ask the customer what they need: the basic module, parts of the comprehensive one or their own questionnaire
  • Gather the numbers: electricity and fuel bills, waste reports, HR figures and injury statistics
  • Convert energy use into scope 1 and 2 emissions
  • Briefly describe the policies and initiatives you actually have
  • Send the report, then reuse it for the next customer and the bank

How Vyve helps

You upload what you have: HSE policy, procedures, incident reports and the annual report. Vyve builds the VSME report from that, and the same analysis gives you an ISO 14001 gap analysis, targets with KPIs and an action plan with owners and deadlines.

The documentation is traceable and the action plan stays live in the platform, so the next request does not start from zero. You will still have to find last year's electricity bill yourself.

Frequently asked questions

Is VSME mandatory?

No. No law requires a company with up to 1,000 employees to use it. But when a customer or bank asks, it quickly becomes a condition for the contract or the loan.

What is the difference between VSME and VS?

VSME is the standard EFRAG developed and the Commission recommended in 2025. The 2026 Voluntary Standard, often called VS, is VSME with minor changes, set out in an EU regulation. For a supplier, the content is essentially the same.

What is the difference between the basic and comprehensive module?

The basic module is the minimum: energy, emissions, environment, workforce and corruption. The comprehensive module adds climate targets, climate risk and human rights, among other things.

Does a VSME report need an audit?

No. Under the regulation, companies using the standard do not need assurance. A customer can still ask to see the evidence.

Can a customer demand more than VSME?

From 2027, a customer with a reporting obligation cannot require more than the value chain cap for its sustainability report. If they ask for more, you can say no. Contracts and other laws still apply.

How long does a VSME report take?

It depends on your numbers. With energy, waste and HR data in place, the basic module is usually a matter of weeks. The writing is rarely the slow part.

Want to see how it's done?

Book a demo and we'll walk through it on your own documents.

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Sources

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