How to Build a Strategic VSME Report: A Step-by-Step Guide

Designed to ease the complexities of the CSRD, the Voluntary Reporting Standard for SMEs (VSME) has emerged as a practical and accessible alternative for companies that fall outside the scope of the CSRD. While all organisations may not be legally required to comply with the directive, the demand for transparent and credible ESG data from financial institutions, investors, and business partners continues to grow. The VSME framework was developed to offer a lighter yet meaningful option, enabling SMEs and voluntary reporters to position themselves as accountable and forward-thinking actors in their value chains.

However, theory and practice rarely align perfectly. The VSME framework may offer clear guidance, but what is it actually like to produce a report using this standard? Where should you begin? What are the common obstacles along the way, and which stakeholders need to be involved to ensure the process is both effective and efficient? To explore these practicalities, at Greenomy, we put the framework to the test by generating our own VSME report.

In this article, we share key takeaways from our experience with the reporting process, outlining the steps we followed, the decisions we made, and the lessons learned along the way. From unexpected challenges to valuable insights we wish we had known earlier, our goal is to provide a realistic and constructive perspective on what applying the VSME looks like in practice.

Preparing Your VSME Report Step by Step

Step 1: Strategic Planning

Before embarking on your ESG reporting journey, it is essential to understand the VSME framework’s key options and structure. There are four core considerations on which to decide. to take into account:

Basic vs Comprehensive Module
Individual vs Consolidated Reporting
“If Applicable” Disclosures
Voluntary Disclosures

Basic vs Comprehensive Module

The VSME is structured across two modules: the Basic Module and the Comprehensive Module. Organisations can choose to report using one or both modules, depending on their level of ESG maturity, the expectations of clients and partners, and the depth of insight they wish to provide.

Individual vs. Consolidated Reporting

Another key consideration when preparing a VSME report is whether to present it on an individual or consolidated basis. Consolidated reporting is recommended only for parent companies that are required to disclose information on their subsidiaries. For standalone SMEs, an individual report will typically suffice.

“If Applicable” Disclosures

One of the key features of the VSME is the “if applicable” principle, which ensures that disclosures are only required when relevant to the company’s context. This flexibility supports relevance and efficiency, particularly for SMEs with varied operations. Make sure to review all the conditions carefully, as some might be hidden in the application requirements.

Voluntary Disclosures

In addition, the VSME includes a set of voluntary disclosures. These are typically marked with language such as “may” or “can”, offering organisations the opportunity to report beyond the minimum requirements if they wish to demonstrate greater ambition or transparency.

These early decisions will have a direct impact on the methodology you adopt, the departments you will need to involve, and the overall time and resources required for the reporting process.

At Greenomy, we opted to report under both the Basic and Comprehensive modules, submitting our report on an individual basis. We carefully identified all disclosures applicable to our organisation and selected voluntary disclosures to include based on the data available and their relevance to our business.

Step 2: Data Collection and Documentation

The next step is to collect your data and review documentation. This phase lays the foundation for the entire reporting process, and its quality will largely determine the final report's clarity, credibility, and usefulness.

Begin by compiling an inventory of existing internal documents. This includes ESG-related policies, past sustainability reports, codes of conduct, employee handbooks, diversity statements, and any documentation that reflects your organisation’s environmental or social practices. To streamline this process, consider using AI-powered tools to assist with document summarisation. Greenomy’s platform includes a built-in AI assistant designed to help you quickly summarise and extract key insights from your documents, enabling a more efficient review and gap analysis.

With your documentation in place, the next step is to identify gaps. This means mapping the VSME disclosure requirements against the data you already have and pinpointing areas where further information is needed. Some gaps may be straightforward, such as missing quantitative data, while others may highlight the need to develop new internal procedures or improve interdepartmental coordination.

Step 3: Stakeholder Engagement

Engaging the right stakeholders, both internal and external, is essential to producing a reliable and meaningful VSME report. Start with internal stakeholder mapping to identify the departments that hold key data or influence ESG practices, such as HR, Operations, Finance, and Legal. External stakeholders should also be considered, and may include service providers who can provide environmental data.

For our own report, several departments had to be contacted:

IT for data on energy and water usage from our data centres;
Legal for information on company policies, accidents, and fines;
HR for workforce data;
Sales for customer data; and
The Sustainability team for environmental metrics.
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Externally, we also reached out to our office providers for information on water and energy consumption related to our office spaces.

Step 4: Drafting the Report

With your data collected and stakeholders engaged, the next step is transforming that information into a clear, credible, and coherent report. Getting this part right is crucial to ensure your disclosures are not only compliant but also accessible and useful to your audience.

Start by defining the structure of your report. You can draw inspiration from existing ESG reports, particularly those from organisations of a similar size or sector. A recommended approach is to begin with a company profile, followed by your ESG-related policies, and then present your metrics and disclosures.

Our tip: leverage AI tools for narrative generation, formatting, and editing. These tools can help maintain consistency in tone and style and save significant time. At Greenomy, our built-in AI writing tool helps us save time by turning raw inputs into polished, structured content aligned with the VSME framework without the need for separate tools.

Step 5: Internal Review and Finalisation

Before publishing your VSME report, a thorough internal review is essential to ensure accuracy and completeness. Involve senior management to proofread and confirm that the report aligns with the organisation’s strategy, tone, and commitment to transparency. It is also important to verify that no sensitive or confidential information has been included.

Once the content is finalised, hand the report over to the marketing or communications team to apply final formatting, design, and branding elements, ensuring the report is visually polished and ready for publication.

Lessons Learned: What We Wish We Knew Before Starting

Even with solid preparation, several unexpected challenges surfaced during the VSME reporting process. Reflecting back, here are the key things we wish we had known from the outset and how others can avoid the same pitfalls:

1. The “if applicable” principle requires close attention: Some applicability conditions are not immediately obvious and may be buried within the detailed application requirements. For example, Disclosure 38 on waste generation is only mandatory for organisations that generate waste beyond typical household waste. This nuance is only explained in Application Requirement 138.

Our tip: Read the full VSME standard, including all application requirements, before beginning data collection to ensure nothing is overlooked.

2. Some data may be difficult to collect: For first-time reporters, calculating certain ESG metrics, such as GHG emissions, land-use data, or training hours per employee, can be challenging due to a lack of prior tracking or technical expertise.

Our tip: The VSME standard includes guidance and helpful resources for most disclosures. Make full use of these materials, and consider seeking external support for complex calculations if needed.

3. Data is fragmented across departments: Relevant ESG data is often scattered, and different departments may be needed for a single data point.

Our tip: Create a centralised data inventory and assign clear data ownership across departments to streamline access.

4. Stakeholder engagement takes longer than expected: Some teams may not prioritise ESG reporting.

Our tip: Communicate the strategic importance of ESG disclosures and secure leadership support to encourage engagement.

Best Practices for Effective VSME Reporting

To ensure your VSME report is accurate, efficient, and impactful, consider applying the following best practices throughout the process:

Set firm internal deadlines and stick to them: ESG reporting can easily lose momentum without clear milestones. Establish a timeline with checkpoints and hold teams accountable.
Define reporting boundaries early on: Clearly outline the scope of the report, including what entity or entities it covers, the applicable reporting year, and any exclusions. This clarity will guide consistent data collection and narrative building.
Be transparent about methodologies and assumptions: Where estimates or proxies are used, explain your approach openly. This builds trust and allows stakeholders to assess the reliability of your disclosures.
Connect disclosures to your wider business strategy: Don’t report in isolation. Link ESG data to your organisation’s values, goals, and operational decisions to give the report strategic relevance.
Leverage ESG reporting tools or platforms: Consider using dedicated software to manage data collection, version control, and formatting. This reduces manual effort and improves consistency.
Avoid overly technical or internal jargon: Aim for language that is professional, concise, and accessible even for those less familiar with ESG frameworks. Make sure the narrative tells a consistent story, reflecting your organisation’s values and priorities.

How Greenomy Can Help

Greenomy’s platform is designed to simplify the VSME reporting process from start to finish. It offers dedicated capabilities tailored to the VSME standard, including tools for task prioritisation, real-time progress overviews, and AI assistance. Users benefit from integrated workflows that support stakeholder assignment and cross-departmental collaboration, all within a centralised interface.

For organisations seeking expert guidance, Greenomy also provides access to consultants who can assist throughout the entire reporting journey, from scoping and gap analyses to reporting and recommendations.