What is the Voluntary Standard (formerly VSME)? A Quick Overview

The Voluntary Standard is attracting growing attention – not only among companies already familiar with the VSME, but increasingly among those encountering voluntary sustainability reporting for the first time. Here's a quick overview of what it involves.

One point worth clarifying upfront: the Voluntary Standard is not a loose set of suggestions companies can shape however they like. It is a defined catalogue of prescribed quantitative and qualitative disclosures that a company can use as a reference and, where applicable, fulfil.

A clear, EU-wide framework

Companies outside the scope of the CSRD are not obliged to follow any particular approach to sustainability topics. GRI, DNK or other established frameworks remain available, as does a fully bespoke, self-designed report. The appeal of the Voluntary Standard lies elsewhere: a self-designed report demonstrates that a company is engaging with the topic – but not much more than that. For a genuine comparison with other companies, whether in figures or in policies, a freely designed report lacks a common basis. This is exactly where a shared standard comes in: it makes disclosures broadly comparable across companies, without every company having to invent its own format.

Honesty matters here: claiming that a sustainability report automatically improves financing terms or delivers a clear competitive edge would not be accurate – only in a few sectors are customers actually willing to pay more for it. A different trend seems more evident: sustainability information is increasingly treated as a hygiene factor by many stakeholders. The expectation is that basic disclosures exist – not necessarily an extensive, individually crafted report. A structured, clearly bounded standard meets that expectation well.

The European Commission adopted the standard as a delegated act on 3 July 2026. It builds on the framework previously known as VSME, developed by EFRAG, though its scope extends further.

Why the topic still matters despite CSRD fatigue

Many companies have been through a rollercoaster over the past couple of years: first the concern of falling within CSRD scope, in some cases tied to budget planning or decisions on additional headcount. Then the raising of the thresholds, which moved a large share of these companies back out of the mandatory scope. An understandable reaction for many: pause, or set the topic aside altogether.

Regardless of that development, one thing is likely to remain true: demand for sustainability information isn't going away – not only from CSRD-obligated companies further up the value chain, but also, for instance, from banks as part of financing processes. There is currently no indication that this demand is fundamentally declining, even if the scope and depth of individual requests may vary by stakeholder.

What the standard is meant to achieve

The Voluntary Standard itself sets out essentially four purposes: covering the information needs of CSRD-obligated companies regarding smaller partners in their value chain; supporting the data needs of banks and investors and helping make access to finance more transparent; helping management identify relevant sustainability topics within the business – such as workforce, emissions or energy management – and strengthen resilience; and contributing, more broadly, to overarching sustainability objectives.

Worth noting: a report under the Voluntary Standard doesn't automatically translate into better access to finance, but it can help banks and investors assess a company's situation more easily. For that purpose, the Comprehensive Module is likely to be more relevant in practice than the Basic Module alone, given the additional depth it provides.

Two modules in detail

The standard is structured around two building modules:

The Basic Module covers core disclosures across environmental, social and governance topics – including energy and emissions data, workforce structure, health and safety, and fundamental governance information. It forms the minimum requirement.

The Comprehensive Module adds further disclosures that may be particularly relevant to banks, investors and larger corporate customers, covering areas such as climate strategy, social metrics or governance processes in more detail. It can only be applied together with the Basic Module, not on its own.

Both modules apply a so-called "if applicable" principle: a disclosure may be omitted if it factually doesn't apply to the company. Importantly, this is not a materiality test. A topic doesn't fall away simply because a company considers it less significant to its business – only where the underlying matter genuinely doesn't apply.

In brief

Whether and to what extent applying the Voluntary Standard makes sense for a given company depends on its specific objectives and audience. A more detailed discussion is available in our article [Voluntary sustainability reporting: what's the point and when does it make sense]. To understand what has changed compared with the previous VSME standard, see our article [From VSME to Voluntary Standard: what has changed]. For a direct comparison with mandatory CSRD reporting, see [Voluntary Standard vs. CSRD/ESRS – where are the differences?].