What did the Omnibus directive declare about the VSME?
The Omnibus directive was published in the Official Journal of the European Union on 26 February 2026, following its official adoption by the Council of the European Union on 24 February 2026. This directive is the outcome of an agreement reached in December 2025 on the European Commission’s February 2025 Omnibus proposal intfinished to simplify and reduce EU sustainability reporting rules.
The Omnibus directive significantly narrowed the scope for CSRD, leaving many companies who were previously in scope of CSRD unsure about how they should report going forward. For these companies, the European Commission has recommfinished the VSME be applyd as the key standard for voluntary reporting on sustainability.
CSRD in scope companies and regulated financial institutions must report on their value chains. That has translated into a proliferation of questionnaires and templates landing on the desks of tinyer suppliers and borrowers. The directive has introduced a value chain cap for those reporting under CSRD. Such companies cannot request information from entities with up to 1,000 employees beyond that set out in the future VSME Delegated Act (as far as possible).
For Irish companies outside the scope of CSRD, the VSME framework is one potential answer to the question: “When my larger business partners question for data, what should I provide?”
What is the VSME?
The VSME is a simplified standard that was developed by EFRAG in response to the SME Relief Package published by the European Commission in September 2023. The VSME standard was originally designed for non-listed micro, tiny, and medium-sized entities (non-listed SMEs) with fewer than 250 employees. EFRAG’s advice on the VSME standard was delivered to the European Commission in December 2024 following a public consultation and field testing. EFRAG has also published supporting guides as well as a digital template to assist companies start reporting applying the VSME now.
The standard consists of two levels: the basic module and the comprehensive module. Reporting under the basic module serves as a prerequisite for the comprehensive module. Both modules can be tailored with entity- or sector-specific sustainability topics, ensuring the reporting remains relevant and meaningful for your company and its stakeholders.
The basic module contains 11 disclosure requirements and focapplys on key sustainability topics such as greenhoapply gas emissions (scope 1 and scope 2), environmental metrics, own workforce, and anti-corruption. The basic module does not include disclosure requirements about an entity’s value chain.
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