A VSME-Guide for Sustainability Reporting at the EU Level: How Can the Basic Module (Compliant) Reporting Be Established in Three Years? A First Proposal

Abstract

This study provides a three-year roadmap to help micro-, small-, and medium-sized enterprises (MSMEs) in Europe achieve the Voluntary Sustainability Standard for SMEs (VSME) Basic Module-compliant report. From 2024/2025, listed companies must follow the Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS), while non-listed MSMEs face rising pressure from banks, supply chains, and clients to report Environment, Social, and Governance (ESG) metrics. The VSME, launched in December 2024 by EFRAG, adds new expectations towards voluntary standardized reporting. To help MSMEs easily meet these requirements, this paper develops a three-year plan. In year one, MSMEs should disclose existing energy, water, and workforce data. For year two, it is proposed to expand sustainable reporting to social, governance, and environmental metrics such as waste generation, efficiency improvements, and anti-corruption measures. In year three, the focus is on implementing and documenting advanced ESG actions tailored to the sector and size, including practices for resource efficiency and circular economy. Implementing this framework can improve the sustainability initiatives of MSMEs, create new market opportunities, and foster trust among stakeholders for a more sustainable economy.