Voluntary Standard (formerly VSME) vs. CSRD/ESRS – Where Are the Differences?

Companies engaging with sustainability reporting often face the question of which framework is the right fit. Here's an overview of the key differences between the Voluntary Standard and mandatory CSRD/ESRS reporting, with concrete examples.

Mandatory versus voluntary

CSRD and ESRS apply mandatorily to companies exceeding the relevant thresholds – going forward, in principle, more than 1,000 employees and more than €450 million in annual net turnover. The Voluntary Standard is aimed at companies outside that scope. In substance, it covers broadly similar topic areas to the ESRS, though in an adapted and significantly reduced form. Its development also took ESRS consistency into account, so disclosures made under the Voluntary Standard should generally be transferable into later ESRS reporting.

Materiality assessment: a key difference

Under ESRS, the double materiality assessment forms the starting point of reporting: companies must first determine which topics are material to them from a financial and an impact perspective before the actual disclosures follow. This process was simplified as part of the ESRS revision, but remains in place in substance.

The Voluntary Standard dispenses with a comparable formal materiality assessment. Instead, the Basic Module's data points are essentially fixed in advance; the "if applicable" principle only allows disclosures to be omitted where they factually don't apply. A company therefore doesn't need to first determine whether a topic is material – it essentially checks whether a disclosure applies to its situation at all. A disclosure cannot be dropped simply because a topic is considered less significant – it must genuinely not apply.

Size-related simplifications

Both frameworks include size-related simplifications, though structured differently. Under the Voluntary Standard, certain Basic Module data points – for instance, specific energy or emissions metrics – may be downgraded from mandatory to voluntary for micro-undertakings. Under ESRS, company size and materiality tend to affect the level of detail and aggregation of disclosures rather than triggering clearly defined exemptions.

Not just metrics: qualitative disclosures too

The Voluntary Standard doesn't consist solely of quantitative metrics. Both the Basic Module and the Comprehensive Module include qualitative disclosures, for example on whether a company already has practices, policies or planned initiatives addressing particular sustainability topics. In the Basic Module, this is typically a fairly basic statement of whether such practices or policies exist. The Comprehensive Module generally asks for more: a fuller description of the practices and policies named, in some cases including whether they relate to suppliers or customers, along with additional quantitative metrics on the relevant topic. The difference between the two modules on this front lies both in qualitative depth and in additional quantitative detail. ESRS likewise requires comparable qualitative disclosures on policies, actions and targets – so the overall structure is broadly similar, even though the required level of detail differs considerably.

Scope of disclosures

Overall, the ESRS data catalogue remains considerably larger than that of the Voluntary Standard, even after being streamlined in the recent revision. The Voluntary Standard, through its Basic and Comprehensive Modules, is deliberately proportionate and designed for smaller company structures.

Assurance requirement

CSRD reporting requires external assurance. The Voluntary Standard carries no such requirement; a voluntary review is possible, but not mandatory.

A point still evolving

There is ongoing discussion on the ESRS side about whether disclosure of anticipated financial effects of material sustainability risks will ultimately be mandatory or voluntary. The Voluntary Standard doesn't currently include a comparable concept. As the ESRS-side discussion is still developing, this point should be read as a snapshot rather than a settled position.

For a general introduction to the Voluntary Standard, see our article [What is the Voluntary Standard (formerly VSME)? A quick overview]. On whether external assurance might be worthwhile, see [Voluntary assurance under the Voluntary Standard – when it might be worth it]. For how the difference in scope also plays out in implementation effort, see [How much effort does the Voluntary Standard involve in practice?].