The VSME: why many companies struggle and how to get it right

When a company first hears about the VSME, they’re usually faced with two options:

The first is the official VSME questionnaire and guidance from EFRAG (European Financial Reporting Advisory Group).

It’s the source of truth, and it’s important. But in practice it comes as a long and daunting file that’s hard to read, easy to misinterpret, and not very forgiving if you’re a small or medium-sized enterprise, which is who it’s supposed to be designed for.

You can find EFRAG’s information here and the EU’s VSME Standard document here (good luck with that).

The second option is a consultant-led workshop.

You go through the same documents together, provide the same data, and in the end you get the report, usually a PDF. This works well, especially if you want support or need to move fast.

There’s nothing wrong with either of these approaches, And yet, it’s hard to believe that either of these can really be the end-game for SMEs. Is this really what the VSME is for?

The missing option: doing the VSME yourself, and actually understanding it

Most companies don’t want to outsource understanding their own business. They want to:

• know what they’re being asked
• answer what they can, honestly
• understand how it’s relevant
• and update their data when things change, without booking another workshop

That’s the approach in the free VSME questionnaire in ImpactOS.

We didn’t invent new questions. We took the official VSME questions and broke them down into clear, step-by-step inputs that are actually understandable if sustainability isn’t your full-time job.

When the VSME asks about carbon emissions, you don’t have to guess or leave it blank, you can calculate them directly in ImpactOS using the free carbon calculator. When it asks about risks, policies, or workforce topics, you answer what you know, in plain language, in one place.

It’s designed so that you can do it. And more importantly, you can understand what you’ve done.

Where SMEs tend to struggle

The hardest part is rarely the data itself, it’s:

• wanting to look more “ready” than you are
• thinking you need to have all the policies, plans, and targets already in place
• assuming “not yet” is the wrong answer

The VSME isn’t asking for perfection. It’s asking for awareness, in a framework that makes your answers comparable.

Another common struggle is treating the VSME like a one-off task; something to complete, submit, and forget. That mindset usually comes from PDFs and spreadsheets, not because companies don’t care, but because those formats aren’t ideal for increasing your understanding.

How not to make it harder than it needs to be

One of the easiest ways to make the VSME feel heavy is to assume you need to be “done” before you start. You don’t.

Again, the VSME is about awareness, not perfection. Many of the most useful answers are simply “not yet.” Answer what you can, see what it reveals about your business, and then choose a few things that are actually worth improving.

Why this is worth doing properly (even with consultants)

Even if you work with consultants (and many companies do, for good reason) you should still own your data.

Once you’ve completed the VSME in ImpactOS, a few things get easier:

• Requests from customers become easier because companies subject to CSRD are expected to base their supplier data requests on the VSME, and not ask SMEs for information beyond it. The standard is intended to act as a shared baseline (and a clear limit) for what SMEs should be asked to provide.
• Questions from banks and financiers follow the same logic. Sustainability and ESG assessments rely on structured, comparable data. When your information already sits within a recognised framework, that data is easier to provide.
• Because the data is structured and calculated in the same way for everyone, benchmarking and competition becomes fair. You’re no longer comparing apples and oranges, and it becomes easier to see where you stand out and where you have room for improvement.

Done properly, the VSME becomes the foundation for far more than sustainability reporting. It gives you a baseline you can build on, update, and actually use to understand your business, manage risk, and compete more confidently.

We did not reinvent the VSME in ImpactOS, we just made it easier to work with: free, accessible, and practical for everyday business. And you still want support along the way, we’re happy to help.