Why did the EU introduce the VSME standard?

Why did the EU introduce the VSME standard?

Short answer: To standardize the rising flood of ESG data requests and shield SMEs from high administrative costs[72].

According to the EFRAG cost-benefit analysis, one in three medium-sized companies already has to provide ESG information to banks and large customers today—a figure expected to reach nearly 100% by 2028[73]. Each questionnaire creates significant internal effort: on average, micro enterprises spend about €2,100, small companies €4,700, and medium-sized firms €7,100 per ESG request, mainly in staff time[74]. Without a common standard, total costs for EU SMEs to handle such requests could rise from €12 billion in 2025 to €27 billion by 2028[75]. The VSME aims to stop this sprawl by offering a shared language and defining which data matter for SMEs. Banks, investors, and customers can draw the information from one report instead of sending multiple bespoke questionnaires[76]. The standard reduces the time burden for companies and eases access to sustainable finance.

Sources: [72], [73], [76] Stop Drowning in ESG Requests: One VSME Report Can Do It All | Karomia Blog; [74], [75] EFRAG's%20Cover%20Letter%20and%20Cost%20Benefit%20Analysis%20on%20VSME.pdf