The Voluntary Standard (VS, formerly VSME): Sustainability Reporting for Undertakings up to 1,000 Employees, Module by Module

An undertaking reports either the Basic Module alone or both modules, and it requires no double materiality assessment and no assurance.

The delegated regulation replaced Commission Recommendation (EU) 2025/1710 of 30 July 2025, which no longer produces legal effects since 24 September 2026 (recital 5). As a delegated regulation, it applies directly and needs no national transposition. Its legal basis, Article 29ca of Directive 2013/34/EU, entered the Accounting Directive through Directive (EU) 2026/470 (Omnibus I), and the voluntary route sits beside the mandatory regime set out where the Corporate Sustainability Reporting Directive (CSRD) is explained.

This page gives the legal status as of 29 October 2026, the undertakings and institutions that use the standard, the 20 disclosures with their paragraphs in Annex I, the rules that apply to every report, and the four detailed pages on the two modules, the digital template and the legal act.

What Is the Voluntary Standard (VS, formerly VSME)?

The voluntary standard, abbreviated VS and formerly known as VSME (Voluntary Sustainability Reporting Standard for non-listed SMEs), is the set of disclosures in Annex I of Delegated Regulation (EU) 2026/1560 that undertakings outside the CSRD may use to report on sustainability, and the act itself calls it the "voluntary standard" (Article 2(1) and Annex I paragraph 1). The European Commission described it in its news of 3 July 2026 as a "single, proportionate reference framework for sustainability reporting by smaller companies outside the scope of the CSRD". Annex I paragraph 3 states that the standard covers the same sustainability issues as the ESRS, the mandatory European Sustainability Reporting Standards, in a proportionate form.

The name VSME belongs to the earlier versions of the same text. EFRAG used it for its technical advice of 2024, and Commission Recommendation (EU) 2025/1710 carried the same standard under that name. After the Omnibus, the legal name is the voluntary standard, and this page writes VS or VSME for it. The binding text is Delegated Regulation (EU) 2026/1560 (CELEX 32026R1560, OJ L, 2026/1560, 21.9.2026), and its full text with both annexes is published on EUR-Lex. A recommendation of the Commission is no longer the current form of the standard.

From EFRAG Advice to a Delegated Regulation

EFRAG's Sustainability Reporting Board approved the VSME exposure draft on 29 November 2023, after analysing 12 real-life ESG questionnaires that covered around 26,000 SMEs in initiatives of about 700 banks and 450 companies. The EFRAG cover note of 29 November 2023 records that analysis in its paragraphs 25 and 26. The public consultation on the draft ran for 120 days, from 21 January to 21 May 2024, and the field test drew 64 respondents. The board gave its final approval on 13 November 2024, and EFRAG delivered the standard to the Commission on 17 December 2024.

The Commission then adopted Recommendation (EU) 2025/1710 on 30 July 2025 (C(2025) 4984, CELEX 32025H1710), published in the Official Journal on 5 August 2025. The Recommendation rested on Article 292 TFEU and was non-binding.

Directive (EU) 2026/470 inserted Article 29ca, "Sustainability reporting standards for voluntary use", into Directive 2013/34/EU (Article 2(8)), in force since 18 March 2026. Article 29ca(1) required the Commission to adopt such standards by 19 July 2026, and Article 29ca(2) required them to be based on Recommendation (EU) 2025/1710 "in its original version". The Commission adopted Delegated Regulation (EU) 2026/1560 on 3 July 2026 (C(2026) 5011). The European Parliament did not object on 11 September 2026, as the OEIL procedure file 2026/2809(DEA) records, and the act was published on 21 September 2026 and entered into force on 24 September 2026.

Table 1 lists each step from EFRAG's draft to the application of the value-chain cap, with the record that documents it; the EFRAG steps are on the EFRAG VSME project page.

Legal Status on 29 October 2026: Voluntary, in Force, No Assurance Duty

As of 29 October 2026, the voluntary standard sits in a delegated regulation that has been in force since 24 September 2026, yet it creates no reporting duty: Article 2(1) of Delegated Regulation (EU) 2026/1560 says that undertakings not subject to Articles 19a and 29a of Directive 2013/34/EU "may" report under Annex I, and Annex I paragraph 4 says it "does not impose legal reporting obligations unlike the ESRS". Annex I paragraph 2 repeats the point in four words: "This Standard is voluntary." Recital 5 adds that undertakings applying the standard "are not obliged to seek assurance" for the information they report. The act has four articles and two annexes: Article 1 defines the value-chain cap, Article 2 allows voluntary reporting under Annex I and the use of EFRAG guidance, Article 3 sets the cap, and Article 4 governs entry into force and application. Annex I holds the standard and Annex II the datapoints of the cap. Articles 1 and 2 and the standard in Annex I apply from entry into force; only Article 3, the value-chain cap, applies later, from financial years beginning on or after 1 January 2027 (Article 4).

Recital 5 also settles the fate of the earlier text: Recommendation (EU) 2025/1710 is "considered as no longer producing any legal effects" from the entry into force of the delegated regulation, 24 September 2026. That statement sits in a recital, not in an operative article. The same recital encourages Member States to raise awareness among undertakings with 1,000 employees or less, to foster the implementation and acceptance of the standard, and to support the automatic digitalisation of voluntary reporting. In its footnote 2, the act calls Directive (EU) 2026/470 the "Omnibus I Directive". The legal basis of the whole act is Article 29ca(1) of Directive 2013/34/EU, which also governs the periodic review described in the section on EFRAG guidance below.

Compared with the Recommendation, the user scope widened to 1,000 employees and the omission grounds widened. GHG intensity per turnover was deleted from B3, and B10 asks for the gender pay gap only where EU law, Directive (EU) 2023/970, or national rules already require it (paragraph 42(b)).

Who Uses the Voluntary Standard

The voluntary standard is used by undertakings that report on their own initiative, by suppliers that receive data requests from companies reporting under the CSRD, by banks and other financial institutions that collect data from borrowers, and through public services that help small undertakings prepare a report. Each use rests on a different provision. Annex I paragraph 2 defines the intended users, Article 3 of Delegated Regulation (EU) 2026/1560 ties the value-chain cap to the standard, and recital 5 addresses financial institutions. The public services are national offers, not provisions of the act.

Undertakings with up to 1,000 Employees Reporting by Choice

Annex I paragraph 2 of Delegated Regulation (EU) 2026/1560 addresses undertakings which, on their balance sheet dates, do not exceed an average number of 1,000 employees during the preceding financial year, and footnote 2 includes self-employed persons, non-incorporated undertakings and listed micro undertakings. The Recommendation addressed only non-listed micro, small and medium-sized undertakings, those whose securities are not admitted to trading on an EU regulated market (Annex I paragraph 2 of Recommendation (EU) 2025/1710). Its point 2 also opened the standard to SMEs and micro-undertakings in third countries; Delegated Regulation (EU) 2026/1560 contains no equivalent statement.

The mandatory regime starts at a different line. Under Directive (EU) 2026/470, the CSRD covers undertakings that exceed both a net turnover of EUR 450 million and an average of 1,000 employees during the financial year, individually or for a group on a consolidated basis (Articles 19a(1) and 29a(1) of Directive 2013/34/EU as replaced by Article 2(4)(a) and 2(5)(a) of Directive (EU) 2026/470), for financial years starting on or after 1 January 2027. Listed SMEs left the CSRD altogether: Article 2(7) of Directive (EU) 2026/470 deleted Article 29c, which had provided their separate standard.

Suppliers Receiving Data Requests from Reporting Companies

A supplier that does not exceed an average of 1,000 employees during the preceding financial year is a protected undertaking under Article 19a(3) of Directive 2013/34/EU as amended by Article 2(4)(b) of Directive (EU) 2026/470, and Article 3 of Delegated Regulation (EU) 2026/1560 makes the voluntary standard the basis of the value-chain cap, the upper limit of what a reporting company may require from it. Article 29a(3), as amended by Article 2(5)(b), applies the same rule to groups. Article 1(1) of the delegated regulation defines the cap as the upper limit of sustainability information that undertakings under Articles 19a and 29a may require from value-chain undertakings of that size.

The cap does not cover the whole standard: it "shall only comprise the datapoints specified in Annex II" (Article 3(2)). Article 3 applies to financial years beginning on or after 1 January 2027 (Article 4). The right of a protected undertaking to decline requests beyond the cap rests on Article 19a(3) as amended, and Member States must transpose it by 19 March 2027 (Directive (EU) 2026/470). Which datapoints Annex II lists, and what a request may contain, is set out under the value-chain cap on requests to suppliers.

Banks and Other Financial Institutions Requesting Data

Banks, insurers and other financial institutions are not bound by a cap: recital 5 of Delegated Regulation (EU) 2026/1560 says they are "still encouraged" to limit their requests to undertakings with 1,000 employees or less, for purposes beyond CSRD reporting, as far as possible to the information in Annex I. The encouragement names financial institutions, financial market participants, insurance undertakings and credit institutions. Point 5 of Recommendation (EU) 2025/1710 had asked the same institutions to limit their requests to SMEs in the same way.

Bank supervision points to the standard as well. The EBA Guidelines on the management of ESG risks (EBA/GL/2025/01), published on 9 January 2025 and applicable from 11 January 2026, say in paragraph 25 that institutions should use counterparties' sustainability information, in particular under the ESRS or "the voluntary reporting standard for non-listed SMEs". In the consultation, a respondent asked that SME data requests never exceed the VSME; the EBA added a reference to the voluntary SME standard but no hard limit.

Free Public Reporting Services in France and Germany

France's Ministry of the Economy offers a free service on its Portail RSE for preparing a report under the voluntary standard.

In Germany, a free module for the standard runs on the DNK platform in Germany.

How the Voluntary Standard Is Structured: Two Modules and 20 Disclosures

The voluntary standard has two modules: the Basic Module with 11 disclosures, B1 to B11 (Annex I paragraphs 27 to 43), and the Comprehensive Module with 9 disclosures, C1 to C9 (paragraphs 46 to 64), and the Basic Module is a prerequisite for the Comprehensive one (paragraph 7). The Basic Module is the target approach for micro undertakings and the minimum requirement for all other undertakings (paragraph 6(a)). The Comprehensive Module adds the datapoints that banks, investors and corporate clients are likely to request (paragraphs 6(b) and 44). An undertaking cannot report the Comprehensive Module without the Basic Module underneath it.

The Basic Module moves from the basis for preparation (B1) and practices and policies (B2) to environmental metrics (B3 to B7), workforce metrics (B8 to B10) and convictions and fines for corruption and bribery (B11). The Comprehensive Module adds strategy, targets, climate risks, human rights and governance diversity. Two of its disclosures show the bank and investor focus: C3 asks undertakings in high climate impact sectors (NACE sections A to H and M) without a transition plan to state whether and when they will adopt one (paragraphs 53 to 55), and C8 covers revenues from prohibited weapons, tobacco cultivation and production, fossil fuels and chemicals of NACE Division 20.2 (paragraph 63). Appendix C of Annex I maps datapoints to SFDR Table 1, EBA Pillar 3 and the Benchmark Regulation.

The datapoints inside the 20 disclosures come in four kinds: essential datapoints, "if applicable" datapoints, voluntary datapoints and sector-specific datapoints (recital 3 and paragraph 8). A further proportionality layer serves the smallest undertakings. The marker "[Voluntary for undertakings with 10 employees or less]" appears 20 times in Annex I, 9 times in the Basic Module and 11 times in the Comprehensive Module. B3, for example, asks for energy consumption in MWh and for estimated gross Scope 1 and location-based Scope 2 emissions in tCO2eq (paragraphs 32 and 33), and both datapoints carry the marker.

Table 2 lists the 20 disclosures with their paragraphs in Annex I and shows where at least one datapoint is voluntary for undertakings with 10 employees or less.

The Scope 3 consideration in paragraphs 49 to 52 has no disclosure code. "Yes" means that at least one datapoint of the disclosure carries the marker.

The datapoint reductions the Commission announced for the 2026 standards concern the ESRS, not this standard. The voluntary standard keeps the modular structure of the Recommendation (recital 3), and undertakings above both CSRD values report the revised (simplified) ESRS disclosures instead.

Option A or Option B and the Statement of Compliance

An undertaking reports under Option A, the Basic Module only, or Option B, the Basic and the Comprehensive Module, and states explicitly which option it applied (Annex I paragraph 27(a)). The statement of compliance is part of B1, the basis for preparation, and B1 also holds the general information every report starts with: legal form, NACE code or codes, balance sheet total, turnover, number of employees in headcount or full-time equivalents, the country of primary operations and significant assets, and the geolocation of sites (paragraph 27(e)). Paragraph 27(a) also sets the rule for each module: "A module shall be complied with in its entirety." An undertaking therefore cannot pick individual Basic datapoints and leave the rest of the Basic Module out. Within a module, the "if applicable" principle and the 10-employee markers still apply.

The EFRAG Secretariat added a practical point at its outreach event of 9 October 2026. According to the EFRAG summary report of that event, an undertaking may state Option A and supplement it with selected disclosures from the Comprehensive Module.

Rules That Apply to Every Report under the Voluntary Standard

Whichever option an undertaking chooses, Annex I of Delegated Regulation (EU) 2026/1560 sets common rules on applicability, groups, comparatives, omitted information, publication and the use of EFRAG guidance. The six common rules and their provisions are listed below.

• Applicability: the "if applicable" principle, Annex I paragraph 15.
• Groups: consolidated reporting and the exemption of subsidiaries, paragraphs 16 and 17.
• Comparatives: previous-year figures, paragraph 14.
• Omitted information: the omission grounds, paragraph 22.
• Publication: the place of the report, paragraph 20, and the combination with EMAS, paragraph 19.
• EFRAG guidance: Article 2(2) of the delegated regulation.

Applicability Instead of a Materiality Assessment

The voluntary standard does not require a double materiality assessment; it works with the "if applicable" principle instead (Annex I paragraph 15). An "if applicable" item is reported only if the circumstances it specifies apply to the undertaking. An item the undertaking leaves out "is assumed to not be applicable". The rule appears in paragraph 15 and again in B1, the basis for preparation. Datapoints also carry conditions in their own wording. B5 asks only about sites in or near a biodiversity-sensitive area and the name of that area (paragraph 35), and B6 asks for water consumption only where the undertaking has significant water-consuming processes (paragraph 37).

EFRAG confirmed the point at its outreach event of 9 October 2026: neither the voluntary standard nor Recommendation (EU) 2025/1710 requires a double materiality assessment, and the "if applicable" principle takes its place.

Groups, Comparatives and Omitted Information

A parent undertaking is recommended to report on a consolidated basis, and subsidiaries covered by that report are exempted (Annex I paragraphs 16 and 17). B1 is where the undertaking states whether the report is individual or consolidated and lists the subsidiaries it covers. From the second year of reporting, the undertaking gives comparative information for the previous year, except for metrics it discloses for the first time (paragraph 14).

Paragraph 22 allows an undertaking to omit information on four grounds, listed below.

• Seriously prejudicial commercial information, in exceptional cases.
• Trade secrets.
• Classified information.
• Information protected under other Union or national law, or for reasons of privacy or security.

An undertaking that uses a ground discloses the omission for each datapoint concerned and reassesses it at each reporting date. The Recommendation allowed omissions only for classified or sensitive information (Annex I paragraph 19 of Recommendation (EU) 2025/1710).

Where to Publish the Report and How to Combine It with EMAS

The primary function of a report under the voluntary standard is to inform counterparties, and an undertaking may publish it in a separate section of its management report or as a separate document (Annex I paragraph 20). Both forms are open to every undertaking that applies the standard, whichever option it reports under.

An undertaking registered under EMAS may present its EMAS disclosures and its disclosures under the voluntary standard in a single report, and it gives the disclosures common to both only once (paragraph 19).

EFRAG Guidance and the Four-Year Review

Article 2(2) of Delegated Regulation (EU) 2026/1560 allows undertakings to use the practical guidance provided by EFRAG, which takes over the role of the practical guidance annexed to the Recommendation. That earlier guidance formed Annex II of Recommendation (EU) 2025/1710, with paragraphs 1 to 144 on the Basic Module and 145 to 180 on the Comprehensive Module.

The standard itself is not fixed. The Commission reviews the standards for voluntary use at least every four years, with technical advice from EFRAG (Article 29ca(3) and (4) of Directive 2013/34/EU).

The Voluntary Standard in Depth: Four Detailed Pages

Four pages here go deeper into the voluntary standard: one for each module with every disclosure and its datapoints, one for the EFRAG digital template that turns a report into a machine-readable file, and one for Delegated Regulation (EU) 2026/1560 as a legal act. The module pages hold the datapoint detail that Table 2 only names, the template page covers the EFRAG files for a digital report, and the page on the act follows Delegated Regulation (EU) 2026/1560 and the Recommendation it replaced. Table 3 lists the four pages with the question each answers.

What the Voluntary Standard Is Not

The voluntary standard is not an obligation, not a certification and not a substitute for the ESRS: it is a reporting option for undertakings outside the CSRD. Article 2(1) of Delegated Regulation (EU) 2026/1560 offers it to undertakings not subject to Articles 19a and 29a of Directive 2013/34/EU, and the two questions below mark its edges.

Is the Voluntary Standard Mandatory for Small Companies?

No: Annex I paragraph 2 says "This Standard is voluntary", and Article 2(1) of Delegated Regulation (EU) 2026/1560 says undertakings "may" report under it.

The standard still matters to a small company in the value chain of a reporting company. From financial years beginning on or after 1 January 2027, what a reporting company may require from a protected undertaking is limited to the Annex II datapoints. Whether the CSRD reaches small companies at all is explained under whether the CSRD applies to small companies and other SMEs.

Can It Replace the ESRS for a Company Above Both Values?

No: a company with more than EUR 450 million net turnover and an average of more than 1,000 employees reports under the ESRS, and Article 2(1) of Delegated Regulation (EU) 2026/1560 addresses the voluntary standard to undertakings not subject to Articles 19a and 29a of Directive 2013/34/EU. Both values must be exceeded, by the undertaking itself or by its group on a consolidated basis, and the duty reaches the company through the national law that transposes Directive (EU) 2026/470, due by 19 March 2027.

From financial years beginning on or after 1 January 2027, such a company applies the revised ESRS of Delegated Regulation (EU) 2026/1563, which enters into force on 10 November 2026. Those standards are a delegated regulation as well and apply directly.

A company in that position plans its double materiality assessment, its sustainability statement in the management report and its limited assurance, not a voluntary report. The steps are laid out in the ESRS compliance plan for in-scope companies.