CSRD reporting has kicked off and has already undergone significant reforms with the changes introduced by Omnibus I. Going forward, only companies with more than a 1,000 employees and a revenue exceeding 450 million euros will be required to conduct comprehensive sustainability reporting in accordance with the CSRD based on the ESRS standards. Companies outside these thresholds may continue to report based on the VS standard (Voluntary Standard, formerly VSME). The standard is intended for small and medium-sized enterprises (SMEs). Many SMEs may currently be wondering whether they should engage in sustainability reporting and, if so, what should be included in such reports. In this blog post, we’ll address these questions.
What is VS (VSME)?
The new, lighter ESRS standards and the VS standard were published in July 2026. VS is a voluntary sustainability reporting standard developed by EFRAG for companies that fall outside the scope of the CSRD. The VS standard is intended for companies that, for whatever reason, wish to prepare voluntary sustainability reports on their operations. The VS standard is based on EFRAG’s ESRS standards and includes disclosure requirements similar to those in mandatory reporting standards. However, the requirements of the VS standard are less extensive and more limited than those of mandatory sustainability reporting. The VS standard replaces the previous VSME standard (voluntary sustainability reporting standard for non-listed SMEs).
What does the VS standard include?
The VS standard has been developed based on the ESRS standards intended for reporting under the CSRD Directive. However, VS is a significantly lighter standard package and consists of two components: the Basic Module and the Comprehensive Module. If a company wishes to begin preparing its own sustainability report based on VS, it must prepare the report in accordance with at least the content of the Basic Module. Additionally, if the company has investors or financiers, for example, the Comprehensive Module can provide important information for the report.
The VS standard covers the same topics as sustainability reporting standards. The reporting requirements are divided into environmental impacts as well as social and governance-related impacts. However, the content of the reporting requirements is significantly simplified and more concise.
How should my company report?
In the table below, we have compiled a list of key climate-related reporting topics for companies of different sizes and in different industries.
| Micro-enterprise | SME | A company in a climate-relevant sector (less than 1,000 employees) | Large company (less than 1,000 employees) | Large company (more than 1,000 employees) | |
|---|---|---|---|---|---|
| The sustainability reporting standard to be used | VS Standard’s basic module; many sections can be omitted in companies with less than 10 employees | The VS standard, including at least the basic module, plus the comprehensive module if desired | VS standard, which is also recommended to be implemented in accordance with the extended module | VS standard, which is also recommended to be implemented in accordance with the extended module | ESRS standards |
| Emissions calculation | Optional for companies with less than 10 employees | At least location-based emissions under Scope 1 and 2, Scope 3 emissions are preferred if they represent significant emissions | At least location-based scope 1 and 2 emissions, though calculating Scope 1–3 emissions across the value chain is recommended | At least location-based scope 1 and 2 emissions, though calculating Scope 1–3 emissions across the value chain is recommended | Scope 1-3 emissions |
| Emission reduction targets | Optional | Optional | If a climate transition plan has been developed, information on emission reduction targets can also be provided | Recommended to be set up as part of a larger module | Must be set |
| Climate transition plan | Optional | Optional but recommended | Should be done, or at the very least, it should be stated whether it will be done and, if so, when | Not required unless operating in a significant sector | If not already done, this must be stated, and whether the company intends to approve such measures must be mentioned; if so, when |
| Climate Risks | Optional | As part of the expanded module, if a company has identified climate-related risks, it must report them | As part of the expanded module, if a company has identified climate-related risks, it must report them | As part of the expanded module, if a company has identified climate-related risks, it must report them | Reporting is required in accordance with ESRS standards |
What kinds of companies is VS reporting suitable for?
For most companies, the reason for voluntary sustainability reporting stems from being part of a broader supply chain. As an example when a company’s customer falls under the scope of the CSRD or otherwise conducts Scope 3 calculations. Companies that are part of such extensive supply chains may want to consider voluntary sustainability reporting. It makes it easier to respond to potential requests for information and even requirements. Of course, the primary reason for voluntary sustainability reporting may also be a company’s desire to assess the sustainability of its own operations and to publicly report on related matters, particularly on its efforts to promote sustainability.
Is VS reporting enough?
From the perspective of sustainability reporting, a VS report is generally sufficient enough for a company. The EU has sought to reduce the information requirements imposed on small businesses by setting conditions for sustainability reporting. Large companies that report in accordance with the CSRD may not demand information other than that required by the VS standard for their sustainability reporting. However, this condition applies specifically to CSRD reporting. Smaller companies may voluntarily submit such information if it is available. If a larger company requests information outside the scope of the VS standard for its sustainability report, it must also state that providing such information is voluntary for the smaller company, and that no law requires the submission of information other than that included in the standard.
Companies of all sizes can set goals and recommendations for their supply chains and stakeholders within their own business operations. For example, a larger company reviewing its entire value chain for sustainability reporting may give preference in its supply chain to companies that can provide more detailed emissions data or have, for example, committed to SBTi emissions reduction targets. The CSRD requirements do not provide guidance on how to structure competitive bidding processes. For many companies, achieving SBTi’s net-zero target also requires considerable effort. It might take the commitment of the entire supply chain to make emissions reductions and reliably demonstrate their achievement.
In order to maintain competitive advantage and develop your own business preparing for other potential information requests may also be a good idea. Depending on the nature of the company’s operations, it may be a good idea to calculate the carbon footprints of products, develop a climate strategy, or set emission reduction targets in line with the SBTi initiative, as all these details may be requested. Therefore providing them may be a requirement in competitive bidding processes while also adding value to your own business.
VS and Emissions Accounting
From the perspective of emissions accounting, VS requires companies to calculate at least scope 1 emissions from their own operations and location-based scope 2 emissions from purchased energy. In addition, if desired, a company may also calculate scope 3 emissions related to its entire value chain. This is particularly recommended if scope 3 emissions are more significant to the company than Scope 1 and 2 emissions. Like scope 1 and 2 calculations, scope 3 calculations are also based on the GHG Protocol standards.
We have built a scope 1 and 2 calculator on the OpenCO2net platform for companies complying with the VS standard. Anyone can test the calculator for free with a small number of emission factors. If a company wants a more comprehensive version of the calculator, along with a printout and a report for purposes such as verification or auditing, they can contact OpenCO2net’s experts via the link found below the calculator or here.
How to Get Started with Scope 3 Emissions Calculations?
Scope 3 calculations can often seem difficult at first, and the workload may seem overwhelming. In our experience, however, it is manageable and, especially after the first calculation, it becomes a routine, just like Scope 1 and 2 calculations. At OpenCO2net, we’ve conducted Scope 3 calculations for companies in many different industries. Our experts can identify, even after a brief discussion, where the largest emissions originate and how resources should be allocated.
The VS standard itself does not require companies to calculate Scope 3 emissions. However calculating them may become relevant, for example, when setting emissions reduction targets. Many small and medium-sized enterprises (SMEs) set short-term SBTi targets only for Scope 1 and 2 emissions, companies must also commit to calculating their own Scope 3 emissions as part of the SBTi validation process.
We recommend starting the Scope 3 calculation process in collaboration with emissions calculation professionals. We offer our clients end-to-end, turnkey emissions calculations. Additionally we have a “Calculate Yourself and Learn” model, where an expert guides the calculation process through joint brainstorming sessions. Once the first round of calculations has been completed with an expert, the following year’s calculation will be easier, faster, and more cost-effective, as the completed calculation can be copied directly into the OpenCO2net carbon footprint calculator to serve as the basis for the next calculation.
OpenCO2net is a carbon footprint platform built by experts, where you’ll find all the tools for your company’s climate efforts. The VS Calculator is a free example of an easy-to-use and affordable calculator. We can offer a more comprehensive version of it to small and medium-sized businesses. In addition, we offer expert assistance and access to the scope 1–3 carbon footprint calculator, product carbon footprint calculations, and the OpenCO2 API, which allows you to integrate emission factors into your company’s own systems. To learn more about our tools and services, please contact us!
