VSME Is Now the Voluntary Standard (VS): What Changed

Companies that spent the past year preparing for VSME reporting may have noticed the name disappearing from official documents. The standard has not been withdrawn or replaced. On 3 July 2026, the European Commission adopted it as a delegated act under the name Voluntary Standard, usually shortened to VS.

For most companies, the practical question is simple: does anything need to change? In terms of the data to collect and the disclosures to prepare, the answer is largely no. In terms of who the standard applies to, and what legal weight it now carries, the answer is yes.

This blog sets out what changed, what stayed the same, and how the value chain cap actually works.

What the Voluntary Standard is

The Voluntary Standard is a sustainability reporting framework for companies that fall outside mandatory reporting under the Corporate Sustainability Reporting Directive (CSRD). It gives those companies a defined, proportionate format for answering sustainability information requests from customers, banks and investors.

It was developed by EFRAG, the technical body that also drafted the mandatory European Sustainability Reporting Standards, and delivered to the Commission in December 2024 under the working name VSME. The Commission recommended it for voluntary use in July 2025, then adopted it as a delegated act in July 2026.

Compared with the full European Sustainability Reporting Standards (ESRS), the standard is deliberately light. It requires neither a double materiality assessment nor external assurance..

Why the name changed

The rename reflects a change in scope, not in content.

VSME stood for the Voluntary Sustainability Reporting Standard for non-listed small and medium-sized enterprises, and it was written for companies with fewer than 250 employees. The Omnibus I Directive, which entered into force in March 2026, raised the mandatory CSRD threshold to companies with more than 1,000 employees and more than €450 million in net turnover. That moved a large group of mid-sized companies out of mandatory scope.

Those companies still face sustainability data requests from large customers and lenders, but the original VSME was not designed with them in mind. The standard was therefore recast to cover all non-listed companies up to the new threshold, and "SME" was dropped from the title because it no longer described the audience. A business with 900 employees and €300 million in turnover is not a small or medium enterprise in ordinary usage, but it is now precisely the kind of company the standard is built for.

What changed and what stayed the same

The table below summarises the shift from the EFRAG version to the adopted delegated act.

The core structure and much of the content carry over, but the Commission made targeted amendments. The Commission retained the overall two-module architecture and disclosure logic, but made targeted changes to align the content with the revised ESRS, reduce the number of datapoints, and clarify how the value chain cap operates.

Who the standard is for

The Voluntary Standard is aimed at companies that are not subject to mandatory CSRD reporting and have no more than 1,000 employees on average during the preceding financial year. The delegated act refers to these businesses as protected undertakings, a term that matters because it defines who benefits from the value chain cap.

Three groups are most likely to use it:

• Companies that were previously in CSRD scope but fell out after Omnibus I raised the thresholds
• Smaller suppliers that receive sustainability questionnaires from larger customers
• Businesses seeking finance, where lenders request structured environmental and social data

Listing status doesn't decide eligibility here. Omnibus I removed listed SMEs from mandatory CSRD scope entirely, so a listed SME with no more than 1,000 employees can use the Voluntary Standard on the same basis as a non-listed company. What matters is whether a company is subject to mandatory reporting, not whether it's listed.

How the standard is structured

The Voluntary Standard uses two modules:

• The Basic Module comprises two general disclosures – B1 (basis for preparation) and B2 (sustainability practices and policies) – plus nine metrics: energy and greenhouse gas emissions, pollution, biodiversity, water, resource use and waste, workforce characteristics, health and safety, remuneration and training, and convictions for corruption and bribery.
• The Comprehensive Module adds 9 further disclosures, referenced C1 to C9. These cover the more detailed information that banks, investors and large corporate customers are most likely to request, and align with requirements under regimes such as SFDR and the Benchmark Regulation.

The modules are sequential rather than alternative. A company cannot report under the Comprehensive Module alone, because completing the Basic Module is a prerequisite for using the Comprehensive Module.

The four disclosure categories

This is the part of the standard that receives the least attention and matters the most. Every disclosure in the Voluntary Standard is assigned to one of four categories, as set out in the European Commission's guidance on the value chain cap:

1. Necessary. Disclosures that a company applying the standard has to report.
2. Necessary if applicable. Disclosures that only have to be reported under certain conditions.
3. Voluntary. Disclosures that a company may report but does not have to.
4. Consideration when reporting sector information. Additional information that may be important in the sector a company operates in.

These categories are not just an internal drafting convention. They determine the boundary of the value chain cap, which is covered in the next section.

The value chain cap explained

The value chain cap is the mechanism that gives the Voluntary Standard real commercial weight, and it is the single most useful thing in the package for suppliers.

Companies subject to CSRD have to report on sustainability risks, impacts, and opportunities across their value chains. To do that, they request information from suppliers and other partners. This has produced what the Commission calls the trickle-down effect: smaller companies fielding long, inconsistent questionnaires from every large customer they serve.

Omnibus I introduced the cap to limit that burden. It prohibits CSRD companies from requiring businesses in their value chain with 1,000 employees or fewer to provide more sustainability information than the Voluntary Standard contains.

The precise boundary is defined by disclosure category, not by module. CSRD companies can only require the information corresponding to disclosures marked necessary, and those necessary disclosures appear in both the Basic and the Comprehensive Module. This is a common point of confusion. The cap is not "the Basic Module only", and companies checking their position should refer to Annex II of the delegated act, which sets out exactly which disclosures fall inside the cap.

Smaller businesses receive additional protection. For reasons of proportionality, some disclosures marked necessary for companies with 11 to 1,000 employees are marked voluntary for companies with 10 employees or fewer. The cap is therefore narrower at the smallest end of the scale.

What the cap does not do

The cap is frequently described as a right for suppliers to refuse anything beyond the Voluntary Standard. That is close, but it overstates the position in three ways that are worth understanding before relying on it.

• It does not stop customers asking. CSRD companies may still request information above the cap. Where they do, they must clearly indicate which parts of the request exceed the cap, and must inform the supplier that it has a statutory right to decline the additional information. The obligation shifts to the requester to be transparent, rather than removing the request entirely.
• It does not cover requests made for other purposes. The cap applies only in the context of fulfilling CSRD reporting obligations. Requests connected to financing decisions, procurement scoring, customer contracts or other EU legislation sit outside it.
• Reporting under the standard does not end the questionnaires. A company that applies the Voluntary Standard will have reported everything a CSRD customer could require of it for CSRD purposes. Customers can still ask for more, both for CSRD reasons beyond the cap and for reasons unrelated to CSRD altogether.

There is, however, a point in the supplier's favour that is easy to miss. The Voluntary Standard delegated act itself makes this point clearly: reporting undertakings should only request information from their value chain insofar as they need it, and should request less than the standard specifies where they do not need all of the information. The Commission has been explicit that CSRD companies are not intended to demand the maximum the cap permits. Suppliers facing a request for the full set of capped disclosures have a reasonable basis for asking which items are actually needed and why.

The standard is adopted but not yet in force. If neither the Parliament nor the Council objects, it enters into force at the end of the scrutiny period.

What companies should do now

Companies that have already begun VSME preparation should continue. The standard did not change underneath them, and the data being collected remains valid.

For those starting now, a practical sequence looks like this:

1. Confirm the position. Check whether the business is subject to mandatory CSRD reporting under the revised thresholds – listing status no longer determines which framework applies.
2. Ask the largest customers what they intend to request. Waiting for the first questionnaire is more expensive than preparing for it. Customers are likely to begin formally requesting Voluntary Standard data during the adaptation period ahead of 2027.
3. Build the Basic Module first. Energy consumption, Scope 1 and Scope 2 emissions, workforce data and governance basics are the foundation, and much of the underlying information already exists in utility bills, fuel records, payroll and waste contracts.
4. Decide on the Comprehensive Module based on demand. If banks, investors or large customers are asking for the more detailed disclosures, the additional work is justified. If they are not, the Basic Module is a reasonable stopping point for now.
5. Choose between manual reporting and a platform. A one-off report can be assembled by hand. An annual report answered across multiple customers, with a consistent audit trail, is usually cheaper to run through a system.

Why the underlying data still matters

The cap reduces the volume of what customers can require, but it does not reduce the need for the data itself. Three points follow from that:

• Requests will continue regardless of the cap. It only binds CSRD reporting requests and only covers necessary disclosures. Scope 3 and climate-related information in particular are areas where large customers have their own reporting obligations to meet, and those requests are unlikely to stop.
• The information has to be defensible. Producing an energy figure or a Scope 1 and 2 total once is straightforward. Doing it consistently every year, with a clear record of the source data and emission factors applied, is what makes the report usable by a customer folding it into their own disclosure.
• The standard is designed as a stepping stone. Because the Voluntary Standard uses a data structure compatible with the ESRS, a company that later grows into mandatory scope can build on what it already has rather than starting again.

How Zevero can help

Zevero supports companies preparing for the Voluntary Standard by handling the measurement layer that sits underneath the disclosures.

• Emissions accounting for the Basic Module. Zevero calculates Scope 1 and Scope 2 emissions in line with the GHG Protocol and ISO 14064-1, using verified emission factors and retaining a clear record of what was applied to each figure.
• Data collection that fits existing records. Energy, fuel, waste and procurement data can be imported through CSV and PDF uploads or through integrations with finance and operational systems, so the reporting process works from the records a business already keeps.
• A traceable audit trail. Calculations can be broken down by facility, category and supplier, which matters when a customer needs to rely on the numbers for its own reporting.
• Access to sustainability specialists. Boundary decisions, unusual data and questions about what a customer is actually entitled to request all benefit from expert input rather than software alone.

Schedule a quick intro call to discuss what the Voluntary Standard means for your reporting position.