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Recommendation on a voluntary SME sustainability reporting standard published

ESG & Sustainablility

Recommendation on a voluntary SME sustainability reporting standard published

On 30 July 2025, the European Commission published a recommendation on a voluntary sustainability reporting standard for SMEs. The primary aim of this standard is to help companies that are not in scope of CSRD to respond to information requests.

Thu 31 Jul 2025

1 min read

On 30 July 2025, the European Commission published a recommendation on a voluntary sustainability reporting standard for SMEs (the Recommendation). The primary aim of this standard is to help companies that are not in scope of CSRD to respond to information requests from those companies that are required to report. The standard set out as Annex 1 to this Recommendation is based on the VSME standard developed by EFRAG with additional guidance on the standard set out in Annex 2.

While the Commission proposed adopting a voluntary SME standard by means of a delegated act for those companies with less than 1,000 employees as part of the Omnibus package on sustainability published in February, it highlighted in the Recommendation that it will not be in a position to do so until such time as negotiations on the proposed amendments to CSRD have been concluded. This means that the content of the future voluntary reporting standard for use by such companies might differ from that set out in the Recommendation.

A recommendation issued by the European Commission or another EU institution is non-binding and can be treated as guidance. The Recommendation provides recommendations to:

It recommends that member states raise awareness among SMEs of the benefits of voluntarily reporting sustainability information in line with this standard. Although the Commission acknowledges in its press release accompanying the Recommendation that it is an intermediary solution to address market demands until a delegated act on a voluntary act is formally adopted.

For more information of the Recommendation and accompanying standard, please contact Jill Shaw or any other member of ALG’s ESG & Sustainability team.

Date published: 31 July 2025

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