Voluntary sustainability reporting

VSME is EFRAG's voluntary sustainability standard for small and medium-sized enterprises, developed as a more proportionate alternative to full ESRS/CSRD reporting. The standard aims to give companies a structured and comparable basis for sustainability reporting while keeping the reporting burden at a reasonable level.

Some companies choose to produce a full CSRD report even though they don't meet the CSRD thresholds. In this case, the report still needs to undergo limited assurance, and the entire process is identical to that of mandatory CSRD reporting.

Companies that fall below the thresholds for mandatory reporting can choose to develop sustainability reporting in their own format, tailored to the organisation's needs, stakeholders, and strategic priorities. At the same time, many choose to draw inspiration from established frameworks and principles, such as ESRS and CSRD, to create reporting that is more structured, comparable, and future-proof, making it easier to scale up to meet any increased requirements and expectations from customers, investors, and financing parties.

Integrated Reporting aims to create more cohesive reporting by connecting financial and sustainability-related information to give a clearer picture of a company's long-term value creation. The focus is often on the relationship between strategy, business model, risks, governance, and sustainability-related issues, and how different parts of the business together shape the company's long-term development and resilience.

We have extensive experience with this type of reporting and help companies develop integrated reporting based on the organization's strategic priorities, stakeholders' information needs, and existing reporting structure. In many engagements, we work to create a clearer connection between sustainability efforts and the organisation's overall strategic and financial development, for example, by integrating sustainability-related risks, targets, KPIs, and governance matters into the broader reporting. For us, integrated reporting is not just a reporting format, but a way of creating more cohesive governance and communication around how a business creates long-term value.

The GRI Standards are one of the most established frameworks for voluntary sustainability reporting and are used by companies across many different industries and markets. This type of reporting focuses on a company's most material sustainability issues and often covers areas such as climate impact, working conditions, business ethics, and value chain impact.

We support companies in developing GRI-based reporting through, for example, materiality assessments, structuring of disclosures, data collection, and the development of processes and reporting documentation. The work is tailored to the organization's needs and level of ambition and can include both developing entirely new sustainability reports and further developing existing reporting. We often work with companies to create reporting that is relevant, transparent, and useful, both for external stakeholders and as support for the organisation's internal governance and follow-up.

For many companies and financial institutions, the demand for clear and credible sustainability information linked to financing and investor dialogue is growing. This can include reporting under frameworks such as green bonds, social bonds, or other sustainability-linked financing solutions, where investors and financiers expect transparency around the use of capital, sustainability targets, and the outcomes achieved.

BDO helps companies develop investor-oriented reporting and disclosures linked to sustainability-related financing frameworks. This work can include developing and refining green bond and social bond frameworks, supporting KPI development and monitoring structures, and reporting related to the use of capital, allocation, and sustainability-related outcomes. We also support organisations in structuring processes, data collection, and documentation to create transparent and credible reporting toward investors, banks, and other financial stakeholders

Following developments under the Omnibus reform and the resulting changes to CSRD's scope, the market is seeing growing interest in more proportionate, voluntary sustainability standards, sometimes referred to as "Voluntary Standards" (VS). The aim is to create structured, comparable sustainability information without the full complexity of mandatory ESRS/CSRD reporting.

This trend is also being driven by the so-called "value chain cap," which in certain cases limits how much sustainability information larger reporting companies can require from smaller actors in their value chain. This is expected to increase the importance of standardised voluntary reporting frameworks as a shared basis of information between companies, customers, investors, and financing parties.

For many companies, this creates a need to determine the appropriate level of transparency, structure, and sustainability governance based on the organisation's strategy, stakeholder expectations, and future regulatory developments.