The difference between VSME and CSRD
Many companies are wrestling with the same question: should we report under CSRD or VSME? In this post we untangle how they differ and which one is relevant for your company.
What are CSRD & VSME?
So what is CSRD? It is a mandatory EU directive with standards (ESRS) that the companies covered by CSRD must follow. The aim of CSRD is to increase transparency and to make reporting consistent across companies. CSRD also includes a double materiality assessment.
And VSME? It is a voluntary sustainability standard developed for companies that are not covered by CSRD. The aim of VSME is to simplify sustainability reporting while still meeting the demands of the market. There are two different versions of VSME: Comprehensive and Basic. You can read more about it in the following post: https://wellfish.se/blog/vsme-whats-the-fuzz
CSRD vs VSME – how they differ
So how do CSRD and VSME actually differ? Both are about reporting, but they differ in several respects, including the following themes:
Scope: CSRD is enshrined in law. The legislation entails mandatory reporting, external assurance and more data points. VSME, on the other hand, is voluntary and is aimed primarily at SMEs (small and medium-sized enterprises).
Level of detail: CSRD contains many data points and is highly detailed. VSME is a simplified standard with two levels – Basic and Comprehensive. The company can choose whichever level is most relevant and respond to the data points it considers applicable given its operations, the so-called "if applicable" principle.
Purpose: CSRD was developed to increase transparency in companies' sustainability reporting and to make sustainability data comparable across different companies. The VSME standard was developed to give smaller companies a standardised and more proportionate way to report sustainability information. The aim is also to make it easier for these companies to meet information requirements from actors in the value chain, for example larger companies covered by CSRD.
Origin and development: CSRD is an EU directive. The standards underpinning CSRD (ESRS) were developed by EFRAG on behalf of the European Commission. VSME is a voluntary sustainability standard developed by EFRAG on behalf of the European Commission.
Sustainability reporting = the core
Whether a company reports under CSRD or VSME, the focus is on the sustainability work itself. The work involves gathering data, analysing it and reporting in line with the standard. Even though CSRD and VSME have different scope and target audiences, both rest on the same fundamental principle: that companies should be able to present their sustainability information in a transparent and comparable way.
So, which of CSRD and VSME is relevant for your company? Whether you are covered by CSRD or choose to report under VSME, you need structure in your data. Wellfish helps you to:
- Automate your climate calculations
- Work in a structured way with sustainability reporting, without manual Excel solutions
- Ensure that your reporting follows a standard that is applicable and relevant to your company's particular ambitions
Want to know which standard is right for you? Book a demo and see how Wellfish can simplify your sustainability reporting.
Wilma Hultström