The VSME standard explained: what Dutch SMEs actually need to know
- Inemesit Ukpanah
- Mar 13
- 12 min read
Updated: Mar 16
Something important happened in the EU sustainability reporting landscape last week. On March 18, 2026, the Omnibus Directive will officially enter into force, raising the CSRD threshold from 250 to 1,000 employees and removing roughly 80% of previously in-scope companies from mandatory reporting obligations. If you are a Dutch SME trying to figure out what any of this means for you, you are not alone.
Here's the short version: the VSME standard is now the most relevant ESG reporting framework for the vast majority of Dutch businesses. The European Commission officially recommended it in July 2025. EFRAG built the free digital template that launched in May 2025. And the Omnibus agreement, now in force, essentially positions VSME as the baseline for all voluntary sustainability reporting in Europe.
This article explains what the VSME standard is, how its two modules work, what data it actually requires, and, critically, where it falls short in ways that most guides won't tell you.
Table of Contents
What is the VSME standard?
VSME stands for Voluntary Sustainability Reporting Standard for non-listed SMEs. It was developed by EFRAG, the European Financial Reporting Advisory Group, under a mandate from the European Commission as part of the 2023 SME Relief Package (Action 14). EFRAG delivered the final standard to the Commission in December 2024. The Commission formally recommended it on July 30, 2025.
The standard exists for one primary reason: large companies reporting under CSRD need supply chain sustainability data to complete their own disclosures. Without a standardised framework, they send different questionnaires to every supplier, and SMEs end up answering 15 versions of the same question in 15 different formats. VSME was designed to address that by providing SMEs with a single framework that large companies and banks can agree to accept.
Whether that goal is being achieved is a separate question. More on that below.
Who does the VSME standard apply to?
The VSME applies to non-listed micro, small, and medium-sized enterprises that fall below the CSRD thresholds. After the Omnibus Directive entered into force on March 18, 2026, those thresholds changed significantly.
The new CSRD thresholds under the Omnibus Directive (in force March 18, 2026)
Category | Employees | Annual turnover | Balance sheet total |
Mandatory CSRD reporting | Over 1,000 | Over €450 million | - |
VSME recommended (voluntary) | Under 1,000 | Under €450 million | Under €25 million |
VSME basic module (micro-enterprises) | Under 10 | Under €2 million | Under €2 million |
Important for Dutch SMEs specifically: The Netherlands has not yet fully implemented the CSRD into national law. Draft implementation legislation is pending and will be amended to incorporate the Omnibus changes. The Dutch minister has announced the intention to exempt companies from reporting obligations for FY2025 and FY2026 if they fall outside the new scope.
This means most Dutch SMEs currently have no mandatory reporting deadline, but market pressure from corporate customers and banks remains real regardless of the law.
The Omnibus Directive amends the scope of the CSRD for financial years starting on January 1, 2027. Member states must transpose the directive by March 19, 2027.
For a full picture of current ESG compliance obligations for Dutch businesses, including what is and isn't enforced, that's covered separately.
Who should use VSME right now?
You should use VSME if any of the following apply:
A large customer has sent you an ESG questionnaire, and you need a standardised way to respond
Your bank is requesting sustainability information as part of a green finance application
You want to start ESG reporting before you are legally required to, without the cost of full CSRD preparation
You had previously begun CSRD preparation as a Wave 1 or Wave 2 company and now fall outside the new scope. VSME is the logical interim framework
You should not use VSME if you have more than 1,000 employees or exceed the Omnibus turnover thresholds. VSME is not your framework; read the full breakdown of what full CSRD requires instead. Those companies are still in scope for mandatory CSRD reporting.
How the VSME standard is structured
The VSME uses a modular structure with two reporting options. This is one of its genuine strengths; you don't have to implement everything at once, and the framework scales with your capacity and your stakeholders’ demands.
The basic module (B1–B11)
The basic module covers 11 disclosure areas and is designed for micro-enterprises starting from zero. Think of it as a credible minimum: if you complete the basic module accurately, you have a defensible ESG disclosure that most banks and large companies will accept as a starting point.
Disclosure | What it covers |
B1 | General information, business description, sector, locations, number of employees |
B2 | Environmental practices, policies, and certifications |
B3 | Energy consumption and GHG emissions (Scope 1 and 2) |
B4 | Pollution-related impacts and practices |
B5 | Water consumption and water management |
B6 | Biodiversity impacts at operational sites |
B7 | Resource use, circular economy, and waste |
B8 | Workforce, headcount, diversity, health and safety, training |
B9 | Social and human rights practices, including the supply chain |
B10 | Governance, anti-corruption, and business conduct policies |
B11 | Additional sustainability information relevant to the business |
The basic module requires approximately 50–70 data points, depending on your business model. Most of the data you need already exists somewhere in your organisation, utility bills, HR records, and supplier contracts. The challenge is not finding it, it's knowing how to format and verify it.
The comprehensive module (C1–C9)
The comprehensive module adds nine additional disclosure areas for SMEs that want to go beyond the minimum, either because their stakeholders demand it or because they operate in sectors with higher ESG exposure.
Disclosure | What it covers |
C1 | Climate-related risks and opportunities |
C2 | Practices and policies for transitioning to a sustainable economy |
C3 | Pollution targets and reduction initiatives |
C4 | Water targets and stewardship programs |
C5 | Biodiversity and ecosystem management plans |
C6 | Resource efficiency and circular economy targets |
C7 | Severe negative human rights incidents in the value chain |
C8 | Workforce pay equity and living wage disclosure |
C9 | Governance structures and anti-corruption measures in detail |
The comprehensive module adds roughly 70 additional data points to your basic module disclosures, bringing the total to approximately 140 data points across both modules. EFRAG released dedicated supporting guides for C2, C3, and C7 in December 2025, following its identification of these as the disclosures SMEs found most difficult in field testing.
Which module should you use?
Use the basic module if... | Use the comprehensive module if... |
You have fewer than 10 employees | You have 50+ employees with more complex operations |
This is your first ESG report | You already have some ESG data collection in place |
Customer requests are general sustainability questions | A specific large customer or bank has asked for climate targets or human rights data |
You have no dedicated sustainability resource | You have at least part-time capacity to manage ESG reporting |
You operate in low-impact sectors (services, retail, professional services) | You operate in manufacturing, logistics, food, construction, or energy |
Starting with the basic module and moving to the comprehensive in year two is a legitimate approach and one EFRAG explicitly designed for. You don't need to justify the choice.
The key difference between VSME and CSRD
The question most Dutch SMEs ask first. Here's the honest answer, not the brochure version.
VSME | Full CSRD | |
Who it applies to | Non-listed SMEs under 1,000 employees (post-Omnibus) | Large companies with over 1,000 employees |
Legal status | Voluntary (Commission recommendation; delegated act expected June 2026) | Mandatory for in-scope companies |
Materiality assessment | Not formally required, uses "if applicable" approach | Double materiality assessment required |
Third-party assurance | Not required | Limited assurance required |
Data points | ~50–140 depending on module | 1,000+ across all ESRS topics |
Scope 3 emissions | Optional in basic module; encouraged in comprehensive | Required for material categories |
Typical setup time for SME | 6–10 weeks (basic module) | 4–6 months minimum |
Cost estimate (internal staff time) | 40–80 hours annually | 300–600 hours annually |
Free digital template available | Yes, EFRAG XBRL template (launched May 2025) | No equivalent free tool |
One distinction worth noting: VSME does not require a formal double materiality assessment. Instead, it uses what EFRAG calls an "if applicable" approach, you only disclose on topics that are relevant to your business. You still need to think through which topics apply, but you don’t need to document a formal assessment with financial and impact dimensions scored against each other.
This is simpler. It also means your disclosures are harder to challenge if they are incomplete, because the standard acknowledges that not everything applies to every business.
What the VSME standard actually requires you to collect
Getting specific here, because this is where most guides become unhelpfully vague.
Environmental data
Energy and emissions (B3 - mandatory in basic module):
Total energy consumption in kWh, broken down by source (electricity, gas, fuel, renewables)
Scope 1 GHG emissions in tCO₂e - direct emissions from your operations (gas heating, company vehicles, on-site processes)
Scope 2 GHG emissions in tCO₂e - emissions from purchased electricity and heat
Scope 3 is optional in the basic module but encouraged in the comprehensive module
For the exact formulas behind Scope 1 and 2 calculations, emission factors, and how to express metrics in tCO₂e, see ESG metrics and formulas for SMEs. For Scope 3: if your large customers are asking for it, use spend-based emission factors from the EXIOBASE database as a proxy where you can't get primary supplier data. Document your methodology. This is accepted practice, not a workaround.
Water (B5):
Total water consumption in cubic meters
Whether you operate in water-stressed areas (you can use the WRI Aqueduct tool to check)
Waste (B7):
Total waste generated in tonnes by disposal method (recycled, landfill, incineration, hazardous)
Social data
Workforce (B8):
Headcount broken down by gender and contract type (permanent, temporary, part-time)
Lost-time injury rate (number of lost-time injuries per 200,000 hours worked)
Training hours per employee per year
Any significant incidents related to health and safety
Human rights (B9):
A description of your due diligence process for human rights in operations and supply chain
Any identified risks and what you have done about them
Whether you have a grievance mechanism for workers and affected communities
Governance data
Business conduct (B10):
Whether you have an anti-corruption policy and how it's communicated
Whether you have a whistleblower mechanism
Any confirmed incidents of corruption, bribery, or anti-competitive behaviour in the reporting period
Where the VSME standard falls short, the honest assessment
Most VSME guides won't tell you this part. They should.
The ECB isn't happy with it. The European Central Bank has explicitly stated that the VSME, in its current form, is not suitable for supervisory analysis. The ECB's concern is that simplified metrics and estimation methods don't produce data granular enough for financial risk modelling.
Changes are expected in the comprehensive module before the delegated act is finalised in June 2026. If you build your reporting around the comprehensive module today, some requirements may shift.
Large companies aren’t fully adopting it as their supplier standard yet. The whole point of VSME was to replace the fragmented questionnaires that large companies send to their SME suppliers. That standardisation is happening slowly. Some large Dutch corporates have started aligning their supplier requests to VSME. Many haven’t. In practice, you may still receive questionnaires that go beyond the VSME scope, particularly from companies headquartered outside the Netherlands.
The value chain cap has limits. The Omnibus agreement includes a value chain cap, technically, CSRD-reporting companies cannot demand sustainability information from their SME suppliers above what VSME covers. But the cap applies to what they can demand through formal CSRD supply chain provisions. Commercial relationships work differently. A large customer can still make supplier accreditation conditional on broader data disclosure without it being a formal CSRD data request.
The "if applicable" approach creates ambiguity. Not requiring a formal double materiality assessment makes VSME simpler. It also makes it harder to defend disclosure decisions if a stakeholder later argues you should have disclosed something you didn’t. Document your reasoning for what you considered applicable and what you excluded, even if the standard doesn't formally require it.
The VSME timeline: what has happened and what's coming
Date | Event |
September 2023 | European Commission SME Relief Package mandates EFRAG to develop VSME |
November 2023 | EFRAG approves VSME exposure draft |
January 2024 | EFRAG publishes VSME exposure draft for public consultation |
December 17, 2024 | EFRAG delivers final VSME standard to European Commission |
February 26, 2025 | European Commission publishes Omnibus I simplification package |
May 27, 2025 | EFRAG launches free VSME digital template and XBRL taxonomy |
July 30, 2025 | European Commission officially recommends the VSME standard |
December 2025 | EFRAG publishes three supporting guides (C2, C3, C7) |
December 2025 | European Parliament and Council reach provisional agreement on Omnibus |
February 24, 2026 | Council of the EU officially adopts the Omnibus Directive |
February 26, 2026 | Omnibus Directive published in the Official Journal of the EU |
March 18, 2026 | Omnibus Directive enters into force |
June 2026 (expected) | European Commission publishes the VSME as a delegated act |
March 19, 2027 | Member states must transpose the Omnibus Directive into national law |
January 1, 2027 | New CSRD thresholds (1,000+ employees) apply for financial year reporting |
What the delegated act means: when the Commission publishes the VSME as a delegated act in June 2026, it becomes formal EU law, not just a recommendation. For edge cases on eligibility, the Commission's Q&A on VSME eligibility addresses the most common questions.
The standard is expected to be largely the same as the current recommendation, but some changes to the comprehensive module may be made in response to ECB feedback. Start with the current standard, but monitor EFRAG's updates.
How to start implementing the VSME standard
Step 1: Confirm your eligibility and module choice
Check whether you fall below the Omnibus thresholds (under 1,000 employees, under €450 million turnover). If yes, VSME is your framework. Decide between the basic and comprehensive module based on the table above.
Step 2: Download the free EFRAG digital template
EFRAG released a free VSME digital template with XBRL taxonomy and converter in May 2025. It's available directly from EFRAG's website and is the most practical starting point for data collection. It structures all B1–B11 (and C1–C9) disclosures and includes validation logic to catch common errors.
Step 3: Assign data ownership across departments
Environmental data lives in operations. Social data lives in HR. Governance data lives with your board or legal function. Procurement manages supply chain information. Assign one named person per area, set a clear deadline, and schedule one review meeting before your reporting date.
Step 4: Collect B1–B11 data first
Don't try to do everything at once. The basic module disclosures can be completed in six to eight weeks for most SMEs without existing ESG infrastructure. Complete these before considering whether the comprehensive module applies to your situation. If you're still working out how to collect the underlying data, read how to build your ESG data collection process first.
Step 5: Document your "if applicable" decisions
For any VSME disclosure you're not reporting on, write one sentence explaining why it doesn't apply to your business. "We have no manufacturing sites and therefore B6 (biodiversity at operational sites) does not apply" is sufficient. This protects you if a stakeholder later questions your coverage.
Step 6: Review and update annually
VSME is an annual reporting cycle for most SMEs. Set a calendar reminder three months before your intended publication date to start data collection. The first year takes the longest, expect six to eight weeks. Year two should take two to four weeks once your data collection processes are established.
If you are working out which VSME disclosures apply to your business or building your first basic module report, book a 20-minute call with Greennect. We work specifically with Dutch SMEs on VSME and CSRD-adjacent reporting, and we will tell you upfront whether you need us or whether the EFRAG template and this guide are enough.
FAQ: VSME standard explained
Is the VSME standard mandatory for Dutch SMEs?
No, not yet, and not for most businesses. The VSME is currently a European Commission recommendation, not a legal requirement. The Commission plans to publish it as a delegated act in June 2026, at which point it will become formal EU law, but it will remain voluntary, as SMEs below the CSRD thresholds are not legally required to report. The practical pressure to use it comes from corporate customers and banks, not from regulators, at least for now.
What is the difference between the VSME basic module and the comprehensive module?
The basic module (B1–B11) covers essential disclosures across environmental, social, and governance areas, roughly 50–70 data points. It is designed for micro-enterprises and SMEs starting from scratch. The comprehensive module (C1–C9) adds nine deeper disclosure areas, covering topics like climate transition plans, human rights incidents, and pay equity. Together, they cover approximately 140 data points. Most Dutch SMEs should start with the basic module and assess whether their stakeholders require comprehensive module disclosures before expanding.
Do I need a double materiality assessment to report under VSME?
No. This is one of VSME's biggest practical differences from full CSRD. VSME uses an "if applicable" approach; you report only on topics relevant to your business. You don't need to conduct a formal double-materiality assessment that scores financial and impact dimensions. You do need to think through which disclosures apply and document your reasoning for anything you exclude.
Will the VSME standard change when it becomes a delegated act in June 2026?
Possibly, particularly in the comprehensive module. The European Central Bank has raised concerns that the current VSME standard doesn't produce data granular enough for financial risk supervisory purposes. Some changes are expected before the delegated act is finalised. The basic module is less likely to change significantly. If you start reporting now using the current EFRAG standard, you'll be well-positioned to adapt, but monitor EFRAG's announcements through the second quarter of 2026.
Can my large customers still send me ESG questionnaires that go beyond the VSME scope?
Commercially, yes. The Omnibus Directive includes a value chain cap that technically limits what CSRD-reporting companies can demand from their SME suppliers under formal CSRD supply chain provisions. But commercial relationships work outside those formal provisions. A large customer can still make supplier accreditation or contract renewal conditional on broader data disclosure. The value chain cap protects you in principle. In practice, the negotiating power usually sits with the large customer.
Where can I download the free VSME template?
EFRAG released a free VSME digital template with XBRL taxonomy and converter in May 2025. It is available directly from EFRAG's SME sustainability reporting hub. The template structures all basic and comprehensive module disclosures and includes supporting educational materials. It is available in multiple European languages.
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