Sustainability Reporting for non-listed micro-, small- and medium-sized enterprises according to VSME Standard adopted by EFRAG

This tool is part of the measures envisaged in the “SME Relief Package” approved by the European Commission in September 2023 (COM 2023, 535 final) which, specifically, recognises the concerns of SMEs who are faced with increasing requests for sustainability information from their financial partners and the value chain, often in a non-standardised format. Hence the mandate to EFRAG to develop a standardised and simplified framework for reporting on environmental, social and governance issues which, importantly for SMEs, “will also provide a legal limit for the information that the European Sustainability Reporting Standards can require large companies to obtain from SMEs in their value chains, and hence limit the trickledown effects”. This is therefore an important safeguard to limit the indirect impact on SMEs of the value chain reporting obligations imposed on large companies.

OBJECTIVE OF VSME

The aim of this Standard is to support SMEs in:

  1. providing information that will help satisfy the data needs of large undertakings requesting sustainability information from their suppliers;
  2. providing information that will help satisfy data needs from banks and investors, therefore helping undertakings in their access to finance;
  3. improving the management of the sustainability issues they face. This will support their competitive growth and improve their resilience in the short, medium and long term; and
  4. contributing to a more sustainable and inclusive economy.

VSME covers the same sustainability issues as the European Sustainability Reporting Standards (ESRS) for large companies and is consistent with them, but the requirements are proportionate taking into account the key characteristics of SMEs.

STRUCTURE OF VSME

The Standard has two modules that the company can use to prepare its sustainability report: 1. Basic module includes:

  • basic disclosures (B1 and B2), which concern some general data on the company (B1) and the “practices, policies and future initiatives for the transition to a more sustainable economy” (B2) adopted and implemented by the company;
  • basic metrics concerning Environmental (B3 – B7), Social (B8 – B10) and Governance issues (B11).

This module is the actual objective for microenterprises and constitutes the minimum requirement for other enterprises (small and medium-sized) ; e 2. Comprehensive module: This module introduces the additional information elements to those provided in points B1-B11, which will probably be requested by banks, investors and corporate clients of the company in addition to the Basic Module. The application of the basic module is a prerequisite for the application of the full module.

PRINCIPLES FOR THE PREPARATION OF THE SUSTAINABILITY REPORT

Complying with this Standard

The Standard establishes the requirements that enable the company to provide relevant, faithful, comparable, understandable and verifiable information on:

  1. how it has had and how it is likely to have a positive or negative impact on people or the environment in the short, medium or long term; and
  2. how environmental and social issues have affected or are likely to affect its economic and financial position.

Comparative information

The company must report comparative information for the previous year, except for metrics reported for the first time. The company must report comparative information starting in the second reporting year.

Inclusion of subsidiaries in reported data

If the company is a parent company of a group, it is recommended that the sustainability report be prepared on a consolidated basis, including information from its subsidiaries.

Classified and sensitive information

Classified or sensitive information may be omitted.

ENVIRONMENT METRICS (basic module)

The enterprise shall report:

  1. total energy consumption in MWh, with a breakdown between electricity and fuels from renewable and non-renewable sources (B3);
  2. estimated gross greenhouse gas (GHG) emissions in tonnes of CO2 equivalent (tCO2eq) taking into account the Scope 1 GHG direct emissions (from sources owned or controlled) and Scope 2 indirect emissions (i.e. emissions from purchased energy generation) (B3);
  3. emissions of pollutants to air, water and soil from its operations (B4);
  4. the number and area (in hectares) of sites it owns or uses that are in or near biodiversity sensitive areas (B5);
  5. total water withdrawals, i.e. the amount of water withdrawn within the boundaries of the organisation (or facility). If the enterprise has production processes that consume significantly water, it must report its water consumption calculated as the difference between its water withdrawal and the water discharge from its production processes (B6);
  6. the total annual waste generation by type and destination (B7).

SOCIAL METRICS (basic module)

The enterprise shall report:

  1. the number of employees in headcount or full-time equivalent for type of employment contract (temporary or permanent) and gender (B8);
  2. the number and rate of recordable work-related accidents and the number of fatalities as a result of work-related injuries and work-related ill health (B9);
  3. data on remuneration, collective bargaining and training (B10).

GOVERNANCE METRICS (basic module)

In the event of convictions and fines in the reporting period, the company must report the number of convictions and the total amount of fines imposed.

potrebbe interessarti

Ultime News