SMEs: The right time to start Sustainability Reporting is NOW

Sustainability Reporting for SME's

Sustainability reporting is becoming an essential practice for businesses of all sizes. While many large corporations are already mandated to disclose their sustainability efforts under laws such as the Corporate Sustainability Reporting Directive (CSRD), small and medium-sized enterprises (SMEs) may feel like they are outside the scope of these regulations. Especially in light of the first Omnibus proposal (the European Commission's attempt at simplifying legally mandated reporting), uncertainties of who is in and out of scope are prevalent. However, the changing business landscape means that even SMEs should start preparing for sustainability reporting now.

Why Should SMEs Care About Sustainability Reporting?

Even though most SMEs are not currently obligated to report under the CSRD, they are increasingly expected to provide sustainability-related information to their customers, suppliers, and investors. The broader expectations of business partners and stakeholders mean that non-financial reporting is becoming a necessity.

There are three key reasons why SMEs should start sustainability reporting before they are legally required to:

1. Time: If your business plans to grow, you may soon find yourself falling under reporting obligations. Starting early allows you to prepare gradually instead of scrambling at the last minute.

2. External Factors: If your clients or business partners are subject to CSRD or other reporting frameworks, they will likely ask for sustainability information from you as well.

3. Access to Capital: Investors and financial institutions increasingly consider sustainability performance in their decision-making. Having a sustainability report can improve your access to funding and investment opportunities.

The Voluntary Sustainability Reporting Standard for SMEs

To help SMEs navigate sustainability reporting, the Voluntary Sustainability Reporting Standard for SMEs (VSME) was introduced. This framework provides a structured yet simplified approach to ESG (Environmental, Social, and Governance) reporting.

Who Can Use VSME?

VSME is designed specifically for small and medium-sized enterprises. If your company does not exceed two of the following thresholds, you qualify as an SME and can use this framework:

• Annual turnover of €50 million

• Balance sheet total of €25 million

• 250 employees

What Should SMEs Include in Their Sustainability Report?

The VSME framework offers two levels of reporting: Basic and Comprehensive.

Basic Sustainability Report (Recommended for Micro and Small Companies)

The basic module includes:

Comprehensive Sustainability Report (Recommended for Medium-Sized Companies)

The comprehensive module includes all the above, plus:

Getting Started with Your First Sustainability Report

The key to sustainability reporting is to start simple and build over time. Even small businesses can benefit from aligning their reporting with best practices. The VSME framework makes it easier by focusing on relevant and achievable disclosures.

A great first step is reviewing your current operations to determine what data is readily available. Start with basic information such as energy use, employee numbers, and policies already in place. From there, set realistic goals for improving sustainability practices year after year.

Need Help with Your Sustainability Report?

If you’re feeling overwhelmed or unsure about how to get started, we can help! Our SME Sustainability Reporting Package includes:

• Stakeholder Interviews: Gathering insights from key suppliers, customers, investors, and employees.

• Data Collection and Consolidation: Ensuring all necessary information is captured accurately.

• Report Writing and Design: Compiling a professional and visually engaging sustainability report.

• Sustainability Strategy Development: Helping you create a long-term approach for continuous improvement.

Sustainability reporting is not just a compliance exercise—it’s a strategic tool that can enhance your reputation, improve business relationships, and create long-term value. Don’t wait until regulations force you to act—start your sustainability journey today!

👉 Check out our VSME services here and see YouSustain's own sustainability report for inspiration