VS (VSME) vs CSRD: Key Differences for Mid-Sized Companies
By Morten Rosén, Co-founder & CEO, Future Fluent
The Voluntary Standard (VS, formerly VSME) and the CSRD are two EU sustainability reporting regimes built for companies of different sizes. CSRD is mandatory above 1,000 employees and €450 million turnover. VS is voluntary, considerably lighter, and requires no materiality assessment.
Quick facts
- CSRD applies to companies with more than 1,000 employees and at least €450 million net turnover, for financial years beginning on or after 1 January 2027.
- VS is voluntary in law and aimed at non-listed companies below that threshold.
- Reporting standards differ: CSRD companies report under ESRS. VS companies report under the Voluntary Standard's own two modules.
- Double materiality: required under CSRD, not required under VS.
- Scope 3: required under CSRD. Not part of the VS Basic Module.
- Assurance: CSRD requires limited assurance. VS does not.
- The value chain cap means a CSRD-reporting customer cannot demand more from you than VS covers.
- They are not competing frameworks. VS is deliberately built so its data feeds into a customer's CSRD report.
What is the difference between VS and CSRD?
CSRD is a mandatory EU directive requiring large companies to report against the ESRS. VS is a voluntary standard for companies outside that scope, with fewer disclosures, no materiality assessment and no assurance requirement. VS data is designed to feed a customer's CSRD report.
The framing that helps most is audience rather than difficulty. CSRD asks a large company to account for its full impact across its value chain. VS asks a smaller company to answer, in a consistent format, the questions its customers and lenders keep sending it. Those are different jobs, and the structures follow from that.
Who does each framework apply to?
CSRD applies to companies with more than 1,000 employees and at least €450 million net turnover, plus companies listed on EU regulated markets. VS is for everyone below that line who still receives sustainability data requests, which after the Omnibus is most mid-sized European suppliers.
The threshold moved a long way. Before the Omnibus, CSRD reached well down into the mid-market. If you are a 250 to 500-person company you almost certainly sit outside it now. The detail of where the line falls, and what happens if you are close to it, is covered in who must report under CSRD now.
How do the two regimes compare, side by side?
| Dimension | Voluntary Standard (VS) | CSRD |
|---|---|---|
| Legal status | Voluntary. Adopted by the Commission 3 July 2026 | Mandatory EU directive |
| Who it covers | Non-listed companies below the CSRD threshold | More than 1,000 employees and at least €450M turnover |
| Reporting standard | VS Basic Module (B1 to B11) and Comprehensive Module (C1 to C9) | ESRS |
| Double materiality assessment | Not required | Required |
| External assurance | Not required | Required, limited assurance |
| Scope 1 and 2 emissions | Required in the Basic Module | Required |
| Scope 3 emissions | Not in the Basic Module. Comprehensive, where relevant | Required |
| Sets its own floor | Yes, the value chain cap | Not applicable |
| First application | Voluntary, adoptable now | Financial years beginning on or after 1 January 2027 |
| Penalties | None | Member State sanctions |
How many disclosures does each require?
The VS Basic Module contains 11 disclosures (B1 to B11). The Comprehensive Module adds 9 more (C1 to C9), and requires Basic first. The ESRS, which CSRD companies report against, is substantially larger and was itself simplified by the Omnibus.
The count understates the gap. Several VS disclosures apply only when your circumstances trigger them, so a smaller company legitimately reports fewer than eleven. The walkthrough is in what the Basic Module actually requires, and the choice between the two modules is covered in Basic vs Comprehensive.
Does either framework require a double materiality assessment?
CSRD requires a double materiality assessment. VS does not. Under VS, a disclosure is reported where it applies to your operations, and an omission is taken to mean the topic does not apply. No explanation is required for leaving one out.
This is the largest practical simplification between the two, and it is the one most often missed by companies arriving from CSRD preparation. Many of them built a materiality process first and assumed it carried forward as a requirement. It does not. See does the Voluntary Standard require a double materiality assessment.
What about Scope 3 emissions?
CSRD requires Scope 3. The VS Basic Module does not: it asks for energy consumption and gross Scope 1 and location-based Scope 2 emissions. Scope 3 sits in the Comprehensive Module, where the standard encourages reporting it if the information is relevant.
Worth being precise here, because the difference is often overstated. The Basic Module sets a floor, not a ceiling. Nothing stops you reporting Scope 3 if you have it, and a supplier who can answer a Scope 3 question ahead of being asked is in a stronger position than one who cannot.
What does each one cost?
There is no fee for using either standard. The cost sits in tooling, external support and internal time, and the difference between the two is large. A CSRD report involves a materiality process, a far broader disclosure set and external assurance. A VS Basic report involves none of those.
This is where I see the most money wasted. Enterprise ESG platforms were priced for companies carrying mandatory CSRD obligations. Plenty of mid-sized companies bought one, then watched the obligation disappear in the Omnibus, and are now paying enterprise prices to produce a report a fraction of that size. Right-sizing the tooling is usually the fastest saving available.
What is the value chain cap, and why does it matter to you?
The value chain cap means a CSRD-reporting company cannot require more sustainability data from a smaller supplier than the Voluntary Standard covers. It gives suppliers a defined ceiling on what can be demanded, and a defensible answer when a request exceeds it.
The cap is the part of the Omnibus that matters most to companies outside CSRD scope, and it is routinely misread as protection from being asked at all. It is not. Your customers will still ask, because they need the data for their own report. What changed is that a complete VS report is now a sufficient answer. What the Omnibus changed for CSRD covers the rest of the package.
If I move from CSRD preparation to VS, what carries over?
Most of it. VS was built to align with the ESRS data model, so emissions data, workforce figures, policy documentation and the internal ownership you established all transfer. What changes is how much you are required to present, to whom, and without a materiality assessment in front of it.
The mistake is treating the move as a restart. It is a change of format, not a change of substance, and companies that already did CSRD groundwork tend to produce a credible VS report far faster than companies starting cold. The full picture is in the complete guide to VS (VSME) reporting.
Can a company report under both VS and CSRD?
No, and it would serve no purpose. If you are in CSRD scope you report under the ESRS. If you are outside it, VS is your framework. They are designed for different audiences, and reporting under CSRD already covers everything a VS report would tell a counterparty.
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Frequently asked questions
Is VS the same thing as VSME?
Yes. VSME was EFRAG's working name. The European Commission adopted the standard as the Voluntary Standard (VS) on 3 July 2026, with the content and two-module structure largely unchanged.
Does VS require external assurance?
No. Limited assurance is a CSRD requirement. The Voluntary Standard does not require an external audit.
If I am no longer in CSRD scope, do I have to report at all?
Not legally. In practice most mid-sized suppliers still receive data requests from customers, banks and investors, and VS is the agreed format for answering them.
Can a large customer demand ESRS-level data from me?
No. The value chain cap limits what a CSRD-reporting company can require from a smaller supplier to what the Voluntary Standard covers.