Small and medium-sized businesses in Ireland may receive requests from larger customers, banks, and investors to share information about their environmental and social practices. These requests can cover energy consumption, carbon emissions, employee conditions, waste management, and business policies. Many smaller companies do not have a formal system for collecting this information, which makes responding difficult.
VSME Sustainability Reporting in Ireland gives small and medium-sized enterprises a voluntary reporting framework for presenting this information in a consistent format. Developed through the European Financial Reporting Advisory Group (EFRAG) and recommended by the European Commission in July 2025, the standard helps smaller businesses explain their sustainability practices without following the full reporting requirements designed for larger companies.
Finsoul Ireland offers ESG and sustainability consulting services, including ESG assessments, gap analysis, sustainability planning, and reporting support, to help businesses review their existing practices and prepare relevant sustainability information.
What Is the VSME Sustainability Reporting Standard?
The Voluntary Sustainability Reporting Standard for non-listed small and medium-sized enterprises (VSME) is a European framework designed to help smaller businesses report environmental, social, and governance information.
Its purpose is to make sustainability information easier for SMEs to prepare and share with business partners. Large companies may request this information from suppliers, while banks and investors may use it when assessing sustainability-related risks.
Unlike mandatory sustainability reporting frameworks, the VSME is voluntary. The European Commission adopted Recommendation (EU) 2025/1710 on 30 July 2025, encouraging its use by eligible smaller businesses. It should not be confused with a legal requirement for every Irish SME to publish a sustainability report. The standard contains two reporting modules:
- Basic Module: Covers general business information, environmental metrics, workforce information, and business conduct. It is the intended starting point for micro-undertakings and the minimum module for other businesses using the standard.
- Comprehensive Module: Adds further disclosures that banks, investors, and corporate customers may request. Businesses must complete the Basic Module before using the Comprehensive Module.
Why VSME Reporting Matters for Irish SMEs
Sustainability information is becoming relevant to everyday commercial relationships. A small manufacturer supplying a large European company, for example, may be asked to disclose its electricity consumption, waste practices, and greenhouse gas emissions. A professional services firm may receive questions about employee welfare, workplace policies, and responsible business conduct. VSME reporting gives businesses a recognized format for organizing these details rather than responding to every request separately.
Responding to Customer and Supplier Requests
Large companies increasingly need information about the environmental and social performance of their supply chains. Their smaller suppliers may therefore receive sustainability questionnaires as part of procurement or supplier assessment procedures.
Using the VSME framework can help an SME organize its information and respond to relevant requests more consistently. It does not guarantee that every customer will accept the report, as individual customers may have additional reporting requirements.
Improving Access to Business Finance
Banks and investors may consider environmental and social risks when reviewing business relationships and financing applications. Having organized sustainability information can help an SME explain its energy use, environmental impact, workforce practices, and relevant business policies. The European Commission specifically identifies access to finance as one of the reasons for introducing the voluntary standard.
Identifying Business Costs and Environmental Risks
Preparing a report also gives management an opportunity to examine expenses and operating practices. Reviewing electricity consumption, fuel use, water consumption, and waste records may reveal areas where the company could reduce costs.
For Irish businesses, the Sustainable Energy Authority of Ireland (SEAI) offers energy guidance and support schemes that can help SMEs assess their energy use and identify improvements.
What Irish SMEs Need to Prepare for VSME Reporting
Before preparing a sustainability report, businesses should review the information they already collect. Most companies have relevant records in their accounting systems, energy bills, HR files, supplier documents, and environmental records. The task is to bring this information together and identify what is missing.
1. General Business Information
The Basic Module starts with information about the organization and its reporting arrangements. SMEs should prepare:
- Registered business name and legal structure.
- Main business activities and NACE industry classification.
- Annual turnover and balance sheet total.
- Number of employees.
- Main operating locations and significant business sites.
- Information about subsidiaries, where relevant.
Businesses should also identify whether the report covers an individual company or a wider group. This information establishes which organisation’s activities and figures are included in the report.
2. Environmental and Energy Records
Environmental information forms a significant part of the VSME framework. Companies should gather records relating to:
- Electricity and fuel consumption.
- Renewable and non-renewable energy use.
- Greenhouse gas emissions, including Scope 1 and location-based Scope 2 emissions.
- Water consumption and withdrawal.
- Waste generation, recycling, and reuse.
- Pollution information, where applicable.
- Land use and biodiversity-sensitive locations, where relevant.
For example, a manufacturing business should review electricity bills, fuel purchases, production records, and waste collection documents. A small consultancy may have fewer environmental impacts to report but should still examine its office energy consumption and other relevant activities. Irish businesses can use resources from the Sustainable Energy Authority of Ireland (SEAI) to understand their energy consumption. Its business energy guidance explains how companies can review energy bills, monitor usage, arrange audits, and identify opportunities to reduce consumption.
Businesses exploring sustainable energy Ireland initiatives should also examine whether energy-saving measures, renewable electricity, or equipment upgrades are relevant to their operations. SEAI’s Support Scheme for Energy Audits offers eligible Irish SMEs a €2,000 voucher towards a professional energy audit, subject to the scheme’s conditions.
3. Employee and Workplace Information
The standard also requires information about employees and workplace practices. SMEs should review their HR records to identify the information needed for workforce disclosures. Relevant records include:
- Permanent and temporary employee numbers.
- Workforce information by gender.
- Employee turnover, where the reporting threshold applies.
- Workplace accidents and work-related fatalities.
- Minimum wage compliance.
- Collective bargaining coverage.
- Employee training hours.
- Gender pay information, subject to the applicable reporting provisions.
Businesses should check that their HR records are accurate and that employee information is handled appropriately. Where figures are not readily available, management should establish a reliable method for collecting them.
4. Sustainability Policies and Business Practices
SMEs should also document the environmental, social and governance practices they already follow. These may include waste reduction procedures, energy-saving measures, employee health and safety policies, equal treatment policies, and anti-corruption controls.
The VSME framework does not require a business to claim that it has achieved sustainability targets when no such targets exist. Companies should describe their actual practices and identify any future initiatives they have formally planned.
How to Prepare a VSME Sustainability Report Step by Step
Preparing a report becomes easier when businesses divide the work into manageable stages.
Step 1: Identify the reporting purpose
Establish why the business needs the report. A customer questionnaire, bank request, or internal sustainability review may influence which information deserves particular attention.
Step 2: Select the reporting module
Review the Basic and Comprehensive Modules and decide which option is appropriate. Businesses should consider the information requested by customers, lenders, and investors before making this decision.
Step 3: Collect existing records
Gather financial statements, energy bills, emissions calculations, waste records, HR information, and relevant policies. Use existing documents wherever possible rather than creating duplicate records.
Step 4: Identify missing information
Compare available records against the applicable disclosures. If the business cannot calculate its energy consumption or employee training hours accurately, it should identify what additional information is needed.
Step 5: Check the accuracy of the figures
Review calculations, reporting periods, units of measurement, and supporting documents. Sustainability information should be consistent with the company’s financial and operational records.
Step 6: Prepare and review the report
Organize the disclosures under the relevant VSME requirements. Management should review the information before sharing it with customers, banks, or other interested parties.
VSME Reporting and the Sustainable Development Goals in Ireland
The VSME framework focuses on environmental, social, and business conduct information. These subjects also connect with wider international sustainability priorities.
The United Nations adopted 17 sustainable development goals in 2015, covering areas such as clean energy, responsible consumption, decent work, climate action, and sustainable economic development. Ireland is among the countries committed to the 2030 Agenda.
For SMEs, these goals can offer useful context when reviewing business activities. For example, a company reducing electricity consumption may contribute to cleaner energy use, while a business improving workplace safety may support decent working conditions.
However, the VSME standard is not a requirement to report against all 17 goals. Businesses should describe their actual activities rather than claim alignment without supporting evidence. Considering the sustainable development goals Ireland has adopted can help management understand how its business practices relate to wider national and international priorities.
When Should SMEs Seek Sustainability Reporting Advice?
Some businesses can organise their initial information internally, particularly when they already maintain reliable environmental, financial, and HR records. Others may need professional assistance because their data is spread across several departments or they receive detailed sustainability questionnaires from larger customers. Companies comparing sustainability consulting companies should examine whether the adviser understands the VSME framework, environmental reporting, emissions calculations, workforce disclosures, and documentation requirements. Professional assistance may be useful when:
- The business is unfamiliar with VSME disclosures.
- Environmental or emissions information is incomplete.
- Customer or lender requests require additional reporting details.
- Management needs to identify gaps in existing policies.
- The company wants to introduce regular sustainability data collection.
The appropriate level of support depends on the company’s size, industry, existing records and reporting objectives.
ESG and Sustainability Reporting Support for Irish SMEs
Finsoul Ireland offers ESG and sustainability consulting services for businesses that need assistance with sustainability assessments, reporting, and environmental, social, and governance information. Its ESG and Sustainability Consulting Services cover ESG assessments, gap analysis, sustainability planning, reporting and disclosure support, environmental sustainability, and ESG data management.
For businesses preparing for VSME Sustainability Reporting in Ireland, this support can be relevant when reviewing existing records, identifying missing information, and improving reporting procedures. The work can also help management establish responsibilities for collecting and checking sustainability data.
The level of assistance required will depend on the company’s operations, existing documentation, and reporting objectives. Businesses should first establish what information they need to disclose before deciding on the scope of professional support.
Conclusion
Sustainability reporting does not have to begin with a complicated reporting system. Irish SMEs can start by reviewing the information they already maintain, identifying missing records and documenting their existing environmental and workplace practices.
VSME Sustainability Reporting in Ireland gives smaller businesses a recognized way to communicate this information to customers, lenders, and other business partners. Preparing accurate records now can also make future reporting requests easier to manage.
Finsoul Ireland offers ESG assessment, sustainability reporting support, and advisory services for businesses reviewing their reporting requirements. Companies can contact Finsoul Ireland to discuss their sustainability reporting preparation and identify the support their organization requires.
Frequently Asked Questions
Is VSME reporting mandatory for SMEs in Ireland?
No. The VSME standard is voluntary and was introduced through a European Commission recommendation. However, SMEs may still receive sustainability information requests from customers, banks, and investors.
What is the difference between VSME and CSRD reporting?
CSRD establishes mandatory sustainability reporting obligations for companies within its scope, using the European Sustainability Reporting Standards (ESRS). VSME is a voluntary framework designed for smaller, non-listed businesses that need a proportionate way to share sustainability information.
What information should an SME collect for VSME reporting?
Businesses should collect financial and general company information, energy consumption records, greenhouse gas emissions data, water and waste information, employee records, workplace safety information, and relevant governance policies.
Do small businesses need to calculate carbon emissions?
The basic module includes estimated Scope 1 and location-based Scope 2 greenhouse gas emissions. Businesses should collect the relevant energy and fuel information and use an appropriate calculation method to prepare these figures.
Can an SME use the VSME Basic Module only?
Yes. Businesses can use the Basic Module without adopting the Comprehensive Module. The Comprehensive Module is an additional option for companies that need to provide further information to customers, banks, or investors.