EU: Voluntary Reporting Standard for SMEs Launched
August 05, 2025
On July 30, 2025, the European Commission recommended a new Voluntary Sustainability Reporting Standard for SMEs that are out of scope of the Corporate Sustainability Reporting Directive (CSRD).
The initiative is designed to help SMEs remain competitive within supply chains and improve access to green finance, without imposing the full compliance burden associated with more complex reporting frameworks.
Developed by the European Financial Reporting Advisory Group (EFRAG), the standard provides a simplified framework to help SMEs meet growing demand for ESG data – particularly from larger companies and financial institutions subject to the CSRD. The recommendation is part of the broader Omnibus I simplification package and serves as a transitional measure to address market demands until a formal delegated act is adopted.
Although the new sustainability reporting standard is voluntary, SMEs that choose not to engage may face challenges in maintaining relationships with larger corporate partners, who require increasingly clear and consistent ESG data to meet their own regulatory obligations under frameworks like the CSRD.
The simplified standards offer a clearer structure for integrating sustainability data across supply chains, improving consistency and reducing reporting friction.
To prepare, businesses should:
- evaluate their current ESG data capabilities and identify gaps
- consider adopting the basic module of the voluntary reporting standard
- communicate with key partners about their ESG data needs
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