VSME: ESG answers for the small company
Who must report, who is protected, and what the customer can ask about
Introduction
Large companies must report on their sustainability, including in their value chain. That is why small companies — including craft businesses — receive questionnaires from their customers.
Who must report themselves?
With Directive (EU) 2026/470 (Omnibus I), only companies with more than 1,000 employees and more than EUR 450 million in net turnover must report. Both thresholds must be exceeded. EU countries must have the rules in place by 19 March 2027 at the latest. In Denmark, BEK nr. 328/2026 postpones the requirement for a number of large companies to financial years beginning on or after 1 January 2027.
You are protected
Companies in the value chain with no more than 1,000 employees on average are «protected». The customer may not demand more information than the limits in a voluntary standard from the Commission allow. The small company has the right to say no to more. The customer may rely on the company's own statement of how large it is.
What is VSME?
VSME is a voluntary standard for small and medium-sized companies. The Commission published it as Recommendation (EU) 2025/1710 of 30 July 2025. It consists of a basic module and a comprehensive module. For small and medium-sized companies the basic module is the «minimum requirement». Micro-companies may make do with parts of it.
| Disclosure requirements | Subject |
|---|---|
| B1 | Basis of preparation |
| B2 | Practices, policies and future initiatives for the transition to a more sustainable economy |
| Disclosure B3 | Energy and greenhouse gas emissions |
| Disclosure B4 | Pollution of air, water and soil |
| Disclosure B5 | Biodiversity |
| Disclosure B6 | Water |
| Disclosure B7 | Resource use, circular economy and waste management |
| Disclosure B8 | Workforce – general characteristics |
| Disclosure B9 | Workforce – health and safety |
| Disclosure B10 | Workforce – remuneration, collective bargaining and training |
| Disclosure B11 | Convictions and fines for corruption and bribery |