Sustainability reporting comparison: VSME, ESRS, and ESRS SMART

ESRS SMART offers the best mix of effort and impact.

Sustainability reporting in accordance with the Omnibus

In February 2025, the EU Commission presented the Omnibus Draft, with the aim of easing the burden on small and medium-sized enterprises without straying away from the overarching goal of fostering a sustainable transformation.

These developments show that each company’s maturity and resource level will play a larger role in determining what sustainability reporting requirements they will face.

The key question is therefore: Which reporting method suits your company – in terms of both content and strategy? We present three formats in detail: the VSME standard, the complete ESRS, and a middle ground developed by Fokus Zukunft: ESRS SMART.

VSME: Entry point for small businesses

The VSME standard was developed by the EU for small businesses with simple business models. It offers a greatly simplified introduction to ESG reporting—without requirements for a double materiality analysis or systematic KPI collection. For small businesses with limited capacities and no reporting requirements, this standard can provide initial guidance.

But the VSME has clear limitations:

• No double materiality analysis
• No systematic KPI collection (e.g., CO₂, energy, taxonomy)
• Not suitable for investor communications or banks
• Not compatible with ESRS – becoming ESRS aligned later on can be costly
• Often too superficial for complex business models

Our conclusion: VSME is suitable for small businesses that currently have neither external ESG pressure nor internal capacities. But, for everyone else, we recommend starting with an ESRS SMART report right away – the effort is reasonable, but the benefits are significantly greater.

ESRS: Full reporting in alignment with CSRD

The European Sustainability Reporting Standards (ESRS) are the legally required reporting standards for large companies under the CSRD. They are comprehensive, in-depth, and provide a solid foundation for integrating sustainability into business strategy and processes.

Advantages:

• Compliant with CSRD legislation
• Complete double materiality analysis
• Complete KPI survey including taxonomy, scope 1–3, target paths, etc.
• Ideal for situations involving high external pressure (investors, auditors)

Conclusion:
ESRS is mandatory for all companies subject to reporting requirements—and a great opportunity to integrate sustainability holistically and measurably into corporate management. However, due to the complexity and accuracy of the reporting format, it ties up more human and time resources in comparison to VSME and ESRS SMART.

ESRS SMART: The pragmatic middle ground

ESRS SMART was developed by Fokus Zukunft to offer non-reporting companies a CSRD-compliant but resource-efficient format. It is clearly based on the ESRS data points, but avoids unnecessary complexity.

Advantages:

• Reduced effort compared to the complete ESRS
• Customizable to your industry and priorities
• Ideal for preparing for CSRD requirements
• Strengthens trust among customers, banks, and partners

Conclusion:
ESRS SMART offers the best mix of effort and impact. It is the recommended solution for medium-sized companies that take sustainability seriously but do not have to fulfill extensive reporting requirements.

Comparison of report formats

The following table compares the VSME, ESRS, and ESRS SMART reporting formats:

Practical example: Energy consumption

How different are the three formats?
To illustrate the differences between the reporting formats, let’s take a look at a specific topic: the company’s energy consumption.