EU/VSME : Sustainability reporting to become voluntary and simplified for SMEs (Commission)

The European Commission adopts a recommendation to ease the administrative burden on SMEs (small and medium-sized companies) when reporting on their sustainability requirements to large companies and financial institutions, in Brussels on 30/07/2025.

Two major shifts occur with this VSME (voluntary sustainability reporting standard for SMEs) proposal: sustainability reporting becomes voluntary -not obligatory- and less administrative work will be required from SMEs.

"This future voluntary reporting standard will act as a 'value-chain cap' to protect SMEs and other companies not subject to mandatory reporting under the CSRD (Corporate Sustainability Reporting Directive) from excessive information requests from their value chain partners", outlines the Commission.

The recommendation is part of the simplification package of the Commission. On 26/02/2025, it proposed to limit mandatory sustainability reporting to large companies with more than 1.000 employees. This new recommendation only concerns SMEs under 1.000 employees and makes their sustainability reporting voluntary.

The VSME in…