Clarifying CSRD, Omnibus I, and VSME: What SMEs Need to Know
This week, we are cutting through the noise on three EU sustainability reporting terms that are trending right now: CSRD, Omnibus I, and VSME.
1. CSRD – The Baseline
The Corporate Sustainability Reporting Directive (CSRD) is the EU’s baseline sustainability reporting law.
Originally, it applied to:
Large companies meeting two of three criteria:
Over 250 employees
Over €40 million in turnover
Over €20 million in assets
All listed SMEs on EU regulated markets, even the small ones (though they had a simplified reporting option – ESRS-L – and extended timelines until 2028).
The goal? Transparency. Companies are required to disclose their environmental, social, and governance (ESG) impacts using the European Sustainability Reporting Standards (ESRS).
2. Omnibus I – The Shift
In February 2025, the EU introduced Omnibus I, a major simplification package.
Key change:
Mandatory CSRD reporting now only applies to companies with:
More than 1,000 employees (this is non-negotiable) AND
Either €40 million+ turnover or €20 million+ assets.
Impact:
Many companies that previously fell under CSRD no longer have to comply immediately.
Listed SMEs under 1,000 employees are no longer forced to start reporting in 2028 unless they choose to or grow beyond the threshold.
This shift opens the door to voluntary reporting and that is where VSME comes in.
3. VSME – The Voluntary Option
Adopted on 30 July 2025 and developed by EFRAG, the Voluntary Sustainability Reporting Standard for SMEs (VSME) gives non-listed SMEs a lightweight, scalable framework to report ESG data without the heavy lift of full CSRD.
It is aligned with CSRD principles but designed specifically for smaller businesses.
Even listed SMEs under 1,000 employees can choose VSME as a simplified starting point until full compliance is required.
Watch my full video here →
What’s Next?
I will break down how VSME actually works and how your SME can start using it right away.
Next week, we shall be discussing VSME Structure & Content, exploring the basic module, the comprehensive module, and how it aligns with ESRS.
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