Future-Proofing Your Business: How SMEs Can Navigate Sustainability Reporting
Small and medium-sized enterprises (SMEs) are the backbone of the UK economy but many struggle with the growing pressure to provide sustainability data. Banks, corporates and government bodies increasingly request ESG information, yet the requirements vary widely and often place a heavy burden on SMEs with limited time, resources and expertise.
Sustainability is now a strategic necessity, not an optional extra. To help SMEs cut through the complexity, this blog launches a series exploring the most practical sustainability reporting frameworks starting with the Voluntary Sustainability Reporting Standard for SMEs (VSME).
What Is the VSME and Why Does It Matter?
Developed by EFRAG and endorsed by the European Commission, the VSME standard provides a simplified, standardised framework for non-listed SMEs that want (or need) to disclose sustainability information without the burden of full CSRD compliance.
It is designed for:
· Non-listed SMEs outside CSRD scope
· Micro-enterprises that still want to showcase sustainability progress
· Value chain partners that must provide ESG data to larger customers
The VSME helps SMEs embed environmental, social and governance (ESG) considerations into their operations in a practical, proportional way - enhancing both performance and resilience.
Key Benefits for SMEs
Adopting the VSME can help SMEs to identify opportunities to improve efficiency and resource use, while strengthening business resilience and reducing risk. By increasing transparency with customers, employees and investors, they can also improve sustainability performance across areas such as energy, water and workforce wellbeing. Stronger reporting helps businesses respond more effectively to ESG data requests from corporates and supply chain partners and can unlock financing opportunities linked to credible sustainability practices. It also supports national climate goals, helps companies stay competitive in evolving “green” markets, and ensures they are better prepared for future regulatory changes.
The VSME introduces a flexible, tiered approach with the basic module an accessible starting point that focuses on essential disclosures for SMEs beginning their ESG journey, and the comprehensive module for those with growing ambition who might be working with stakeholders or investors with more complex reporting requirements.
How VSME Aligns with the Sustainability Business Tracker
The Sustainability Business Tracker (SBT) naturally complements the VSME by assessing performance across leadership, operations, energy, materials, waste, water and supply chain activity. For example:
Energy and emissions disclosures in the Basic Module align directly with SBT’s operational metrics.
Workforce and governance information support SBT’s leadership assessments.
The Comprehensive Module’s focus on climate risk, circularity and social impact reflects the Tracker’s broader strategic indicators.
Using both together allows SMEs not only to meet reporting expectations but also to gain clear, data-driven insights into where they are performing well and where improvements can drive commercial value.
Sustainability Business Tracker provides structured and comparable data, the foundation of credible sustainability reporting, and helps SMEs:
Identify material issues and improvement opportunities
Highlight gaps and outline realistic next steps
Benchmark against similar organisations
Prioritise actions that deliver the greatest business and sustainability impact
Allocate resources effectively
By simplifying data collection and providing actionable insights, SBT reduces the reporting burden and enables SMEs to engage meaningfully with customers, investors and other stakeholders.
Whether you’re voluntarily adopting the VSME standard or responding to supply chain ESG requirements, aligning your efforts through the Sustainability Business Tracker allows you to report with confidence while strengthening your performance, competitiveness and long-term resilience.
To find out more about Sustainability Business Tracker or schedule a free demonstration, head to Contact us | Connect and Collaborate Today — Sustainability Business Tracker