ESGora Resources · VSME 2026
The EU Voluntary Sustainability Reporting Standard
A practical guide to Regulation (EU) 2026/1560 for SMEs and consultants: what changed, who it applies to, how the value-chain cap works and which datapoints are covered.
Regulation (EU) 2026/1560
- Adopted
- 3 July 2026
- Published in the OJ
- 21 September 2026
- Entered into force
- 24 September 2026
- Value-chain cap applies
- Financial years beginning on or after 1 January 2027
What changed?
From a recommendation to an EU Voluntary Standard
Regulation (EU) 2026/1560 establishes the voluntary sustainability reporting standard for undertakings outside mandatory sustainability reporting. It builds on the previous VSME framework and retains the Basic and Comprehensive modules, while introducing clearer proportionality and a legally defined value-chain cap.
Up to 1,000 employees
The standard is intended for undertakings outside mandatory sustainability reporting that do not exceed an average of 1,000 employees.
Basic + Comprehensive
The familiar two-module structure remains at the core of the standard.
≤10 employees
Some datapoints become voluntary for the smallest undertakings.
Value-chain cap
Annex II identifies the datapoints covered by the information cap.
A key clarification
Is it mandatory?
No.
The Regulation does not introduce a general sustainability reporting obligation for SMEs. Undertakings outside mandatory reporting may voluntarily disclose sustainability information using the standard.
Voluntary reporting and sustainability information requests are different questions. Customers, banks and investors may still need sustainability data, and the standard provides a common European framework for supplying it.
Basic Module
The starting point
B1–B11 form the target approach for micro-undertakings and the minimum reporting basis for other undertakings applying the standard.
General information · Policies & initiatives · Energy & GHG · Pollution · Biodiversity · Water · Circular economy & waste · Workforce · Health & safety · Remuneration & training · Corruption & bribery
Comprehensive Module
Additional stakeholder information
Additional disclosures address information needs that are more likely to arise from banks, investors and corporate customers.
It should not be understood as a “better” report. The appropriate level depends on the company and the information needs of its stakeholders.
Value-chain cap
A ceiling, not a standard questionnaire
Annex II defines the datapoints covered by the value-chain cap. Mandatory reporters should request information only when they need it and should request less than the maximum where the full set is not necessary.
How the cap works
Requesting side
Undertaking subject to mandatory sustainability reporting
Needs sustainability information from its value chain for reporting under the Accounting Directive.
Information boundary
Annex II value-chain cap
The cap comprises only the datapoints specified in Annex II. The full list is a maximum, not an automatic questionnaire.
Protected side
Undertaking covered by the value-chain protection
Annex II distinguishes the applicable datapoints for undertakings with ≤10 employees and those with more than 10.
The value-chain cap concerns information requested for mandatory sustainability reporting under the Accounting Directive. It should not be read as a general prohibition on information that may be required under other applicable EU or national law.
≤10 employees
A deliberately narrow information set.
- General company and reporting information
- Employees by contract type
- Employees by gender
- Work-related accidents
- Minimum-wage compliance
- Collective bargaining coverage
- Training hours
>10 employees
A broader set that also covers selected environmental and Comprehensive datapoints.
- Energy
- GHG emissions
- Water
- Circular economy
- Waste
- Products & services
- Markets
- Business relationships
- Employee turnover
- Human-rights policies
- Complaints mechanisms
- Confirmed incidents
Annex II
Value-chain cap datapoint explorer
This explorer reproduces the disclosure structure of Annex II for practical navigation. The official Regulation and Annex II remain the authoritative legal source.
| Disclosure | Reference | Official topic / datapoint | ≤10 | >10 | Module |
|---|---|---|---|---|---|
| B1 | Para 27(a)(i)-(ii) | Selected module option (basic and/or comprehensive) | Yes | Yes | Basic |
| B1 | Para 27(c) | Choice of reporting basis (individual or consolidated) | Yes | Yes | Basic |
| B1 | Para 27(e)(i)-(vii) | General undertaking's information | Yes | Yes | Basic |
| B3 | Para 32, first sentence | Total energy consumption in MWh | — | Yes | Basic |
| B3 | Para 33 | Estimated absolute gross greenhouse gas (GHG) emissions | — | Yes | Basic |
| B6 | Para 36 | Total water withdrawal | — | Yes | Basic |
| B7 | Para 38, first sentence | Circular economy principles application | — | Yes | Basic |
| B7 | Para 39(a) | Total weight of waste generated, with a breakdown between hazardous and non-hazardous waste | — | Yes | Basic |
| B7 | Para 39(b) | Proportion of waste diverted to recycling or reuse | — | Yes | Basic |
| B8 | Para 40(a) | Number of employees (in headcount or full-time equivalent) per type of employment contract | Yes | Yes | Basic |
| B8 | Para 40(b) | Number of employees (in headcount or full-time equivalent) per gender | Yes | Yes | Basic |
| B9 | Para 41(a) | Number and rate of recordable work-related accidents | Yes | Yes | Basic |
| B10 | Para 42(a) | Whether employees receive pay equal to or above the applicable minimum wage for the country reported on | Yes | Yes | Basic |
| B10 | Para 42(c) | Percentage of employees covered by collective bargaining agreements | Yes | Yes | Basic |
| B10 | Para 42(d) | Average number of annual training hours per employee | Yes | Yes | Basic |
| C1 | Para 46(a) | Description of significant groups of products and/or services offered | — | Yes | Comprehensive |
| C1 | Para 46(b) | Description of significant market(s) the undertaking operates in | — | Yes | Comprehensive |
| C1 | Para 46(c) | Description of main business relationships | — | Yes | Comprehensive |
| C5 | Para 58 | Employee turnover rate | — | Yes | Comprehensive |
| C6 | Para 61(a) | Code of conduct or human rights policy | — | Yes | Comprehensive |
| C6 | Para 61(c) | Complaints-handling mechanism | — | Yes | Comprehensive |
| C7 | Para 62(a)(i)-(v) | Confirmed incidents in its own workforce | — | Yes | Comprehensive |
| C7 | Para 62(c), first sentence | Confirmed incidents involving workers in the value chain, affected communities, consumers and end-users | — | Yes | Comprehensive |
What it means for SMEs
The practical objective is not to collect every possible ESG datapoint. It is to understand what customers, banks and investors actually need and to maintain reliable information that can be reused consistently.
What it means for consultants
The challenge increasingly moves from producing individual documents to managing a repeatable reporting process across clients, modules, datapoint types and stakeholder requirements.
What happens next?
The legal standard is here. The digital layer is still evolving.
Regulation (EU) 2026/1560 now provides the legal framework for the Voluntary Standard. The technical implementation ecosystem continues to evolve around it.
EFRAG is developing updated digital implementation materials for the 2026 standard, including the Digital Template, XBRL Taxonomy, XBRL Converter, migration tooling and related documentation.
Why this distinction matters
Companies and software providers can work with the official legal standard now, while avoiding premature assumptions about a digital taxonomy that is still being finalised.
Timeline
3 Jul 2026
Regulation adopted
21 Sep 2026
Published in the Official Journal
24 Sep 2026
Regulation entered into force
FY ≥ 1 Jan 2027
Value-chain cap applies
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