VSME: Practical reporting guide with datapoints checklist

Using VSME as a framework for voluntary ESG reporting

Today, companies are expected to report sustainability information transparently, even in the absence of formal obligations. Key clients and business partners often require access to ESG data before entering into contracts, while banks and investors are increasingly relying on it to inform credit and financing decisions. At the same time, ESG data is becoming an essential internal asset supporting strategic planning, driving competitive growth, and strengthening organizational resilience.

The Voluntary Sustainability Reporting Standard for Non-Listed Micro-, Small- and Medium-Sized Enterprises (VSME) offers a practical solution. It provides SMEs with a structured framework to capture ESG data for the first time or to organize existing reporting, enabling them to engage in voluntary sustainability reporting without creating a heavy administrative burden.

Using the VSME framework, companies can clearly identify relevant datapoints, structure data collection processes, and prepare ESG information in a way that is meaningful for both external stakeholders and internal decision-making.

Discover how to apply the VSME standard in practice, complete with a practical checklist for structured data collection.

From decision to implementation: how companies start the VSME process

Once a company decides to adopt the VSME standard, the process begins with a systematic approach that ensures all relevant ESG data is captured and meaningfully prepared, step by step. 

Step 1 - Scoping

Before beginning the collection of individual VSME datapoints, companies must make a series of foundational decisions. These choices define the overall scope, reporting complexity, and the resources required to complete the process effectively.
 

1.1 - Purpose and objectives

Clearly define the purpose of the sustainability report, whether it is intended for internal management, benchmarking, regulatory preparation, or stakeholder communication. Take into account both strategic priorities and external factors, such as requirements from clients, financial institutions, or partners across the value chain.
 

1.2 - Module selection: Basic Module vs. Basic + Comprehensive Module

Select the module(s) that best align with your strategic objectives and the availability of data:

• Basic Module: Designed for entry-level ESG reporting, focusing on key metrics; pragmatic and well-suited for companies with limited resources.
• Basic + Comprehensive Module: Intended for companies with advanced ESG management or external reporting obligations (e.g., to clients, banks, or investors). This module requires more in-depth data collection and internal coordination but enables a comprehensive strategic presentation.
   

1.3 - “If applicable” principle and voluntary disclosures

The VSME standard distinguishes between mandatory disclosures, application-based disclosures (“if applicable”), and voluntary disclosures. This distinction is critical to the scoping phase, as it directly determines which datapoints a company is required to report. Identify the application-based datapoints relevant to your organization and decide the extent to which you wish to include voluntary disclosures.
 

Step 2 - Defining the reporting structure

Clearly establish the organizational and structural foundations needed to conduct the reporting process effectively.
 

2.1 - Scope of the report

Decide whether reporting will be carried out at the individual entity level (company only) or on a consolidated basis (including subsidiaries). Consolidated reporting should only be pursued if data structures can be centrally managed and verified.

• Individual entity level: aggregated total values in the report
• Consolidated: internal data collection and review per unit; the report shows aggregated values
   

2.2 - Reporting period

Define the reporting period, ideally aligned with financial or business reporting cycles to ensure comparability. Take into account external benchmarks or regulatory requirements where applicable.
 

2.3 - Resources and responsibilities

Assign central oversight and clearly define roles across departments and subsidiaries (e.g., who provides data from HR, Finance, Environmental, or Compliance functions). A clear allocation of responsibilities prevents duplication of effort, ensures that all relevant data is captured, and makes it easier to track open items.

Step 3 - Identifying data structure and sources

Identify existing data sources, formats, and availability to ensure a comprehensive and reliable reporting process.

• Typical sources: Human Resources, Finance, Environmental Management, Supplier Portals, Compliance Systems, and Subsidiaries.
• Format Verification: Assess the data formats and units used (e.g., CO₂ in tCO₂e, revenue in million €).
• Availability: Determine which data is already available and identify any gaps that need to be addressed.

Step 4 - Data collection and quality assurance

Collect data according to the defined responsibilities and assess the quality of the existing information base.

• Quality: Check for plausibility, completeness, and consistency.
• Data Gaps: Document any missing information and determine whether gaps can be addressed through estimates, approximations, or additional data collection processes. This step is critical to ensure the credibility and traceability of your report.

Step 5 - Preparing and finalizing the report

In the final step, compile and structure the collected data in accordance with the VSME standard, ensuring it is ready for reporting and stakeholder review.

Common challenges in the VSME process and how to address them

The VSME reporting process involves both operational and organizational challenges. Three obstacles frequently arise in practice, but they can be effectively managed through clear structures and pragmatic approaches.

Missing data or insufficient data granularity

Many companies have basic ESG data, but it is often not structured, systematized, or detailed enough to meet VSME requirements. Key metrics may exist only in aggregated form and are frequently not categorized as required (e.g., total energy consumption by energy source). Inconsistent data formats across departments further complicate collection and comparability.

• Prioritize over perfection: Begin with available, reliable data and transparently indicate where additional detail or completeness is needed.
• Standardize data structures: Define consistent formats early and establish clear responsibilities, including the scope of data coverage for each input.

• Leverage software: Automate data collection (e.g., from energy management systems or HR tools) to ensure long-term consistency and minimize manual effort.

   

Managing missing mandatory data

• Document gaps: Clearly indicate any missing data in the report and explain why it is unavailable (e.g., missing measurements, reevaluation of supplier data, etc.).
• Use plausible estimates: Where possible, apply estimates or approximations based on historical values or standardized conversion factors. Each estimate must be clearly identified and documented to ensure transparency and traceability. Note that estimates are a temporary measure and do not replace long-term data collection.
• Systematically close gaps: Define concrete actions, assign responsibilities, and set timelines to ensure missing data is fully captured in the future (e.g., implementing new measurement systems, expanding data collection processes).

Unclear responsibilities

In many companies, ESG data is dispersed across multiple departments. Without clearly defined roles and responsibilities, gaps, duplication of effort, and inconsistent information can occur, posing a risk to data quality and the credibility of the VSME report.

Practical approaches:

• Clearly assign responsibilities: Ensure that each VSME datapoint is owned by a specific department or individual.
• Establish central coordination: Designate a central entity (e.g., an ESG manager) to oversee interfaces and maintain overall accountability.
• Leverage digital tools: Solutions such as Envoria’s VSME software can streamline the reporting process by clearly defining roles, access rights, and responsibilities.

Uncertainty in qualitative disclosures

In addition to quantitative metrics, the VSME requires qualitative disclosures, which must be documented in narrative form. The challenge lies in presenting material information in a clear, consistent, and traceable manner.

Practical approaches for qualitative disclosures:

• Focus on materiality: Report only information that has a significant impact on your business model, ESG strategy, or value creation.
• Use structured guiding questions: Organize narratives around objectives, actions, progress, challenges, and outlook.
• Link to data: Support narrative disclosures with quantitative metrics or documented processes.
  Leverage Software: Tools such as Envoria enable centralized data collection, structured organization of information, and integration of qualitative narratives with quantitative metrics.

From reporting to a strategic management tool

Implementing the VSME standard brings clarity to processes, responsibilities, and data flows, enabling ESG data to be collected systematically. This structured ESG information can be used directly to inform internal decision-making, from managing initiatives and allocating resources to shaping strategy and overseeing risk. At the same time, VSME reporting helps companies achieve regulatory readiness. By adopting a systematic VSME approach today, organizations lay the groundwork for faster, more efficient, and less resource-intensive compliance with future requirements such as the CSRD.

In addition to practical guides and checklists that simplify the initial steps of VSME reporting, companies can benefit from adopting specialized software. ESG data typically originates from multiple departments across the organization, comes in different formats, and requires regular updates. Manual collection and consolidation almost inevitably result in errors, inconsistencies, and reduced traceability.