New Voluntary Standard Makes Sustainability Reporting Easier for SMEs

A new European voluntary sustainability reporting standard, the VS Standard, was adopted in September 2026. It is designed for companies that are not subject to the mandatory sustainability reporting requirements that apply to large enterprises. The standard aims to make sustainability reporting easier, particularly for small and medium-sized enterprises (SMEs), while helping to streamline the information requests they receive from customers, banks, and investors.

The VS Standard replaces the voluntary VSME Standard introduced in 2025. Reporting requirements have been simplified in several areas, and companies are not required to obtain external assurance for reports prepared in accordance with the standard.

One of the most important changes is the introduction of the value chain cap. This limits the amount of sustainability information that larger companies can request from suppliers and business partners with fewer than 1,000 employees. For many SMEs operating as subcontractors or suppliers, this could significantly reduce reporting burdens and administrative work.

Two Reporting Modules for Different Needs

The standard consists of two modules:

The Basic Module is primarily aimed at micro-enterprises but also serves as the foundation for reporting by other SMEs. It covers key topics such as energy consumption, greenhouse gas emissions, water use, waste management, circular economy practices, workforce issues, and occupational health and safety.

The Comprehensive Module includes additional information that may be required by banks, investors, and larger customers. These disclosures cover topics such as Scope 3 emissions, climate-related risks, emission reduction targets, and human rights considerations.

To reduce the burden on the smallest businesses, micro-enterprises are not required to report all data points included in the standard. Companies may also supplement their reports with sustainability information that is particularly relevant to their sector or business activities.

A Practical Framework for Managing Sustainability Data

For SMEs, voluntary sustainability reporting offers a structured and practical way to collect, manage, and communicate sustainability information. Reports can be used to respond efficiently to requests from customers, financiers, and other stakeholders. Companies may also choose to publish the report as part of their annual report or as a standalone sustainability report.

Supporting SMEs on Their Reporting Journey

The Sustainable SMEs project, coordinated by Jamk University of Applied Sciences, supports SMEs in developing their sustainability reporting capabilities. The project offers workshops on topics such as data analytics and the use of artificial intelligence in reporting, as well as webinars covering reporting requirements and related standards.

Feedback from participating companies has been overwhelmingly positive. Businesses have highlighted the value of receiving practical guidance, up-to-date information on emerging legislation, and demonstrations of tools that can support reporting processes. Participants also appreciated the collaborative and supportive atmosphere of the workshops.

In coming months, Sustainable SMEs will host a Mastering Your Carbon Footprint workshop, offering practical guidance on calculating and managing carbon footprints. Companies interested in strengthening their sustainability capabilities are warmly invited to participate.

Further Information

Voluntary Sustainability Reporting Standard (VS) for companies with fewer than 1,000 employees protected by the value chain cap (2026). Read more on the European Union's official website (available in all EU languages and in English).

Simplified European Sustainability Reporting Standards for Large Companies (ESRS) (2026). Read more on the European Union's official website (available in all EU languages and in English).

Guidance, reporting templates, and updates on the development of sustainability reporting standards are available from EFRAG. Read more on EFRAG's website.

The same information available in Finnish on Jamk's website.