EU Voluntary Sustainability Reporting Standard 2026 Explained

Many smaller and mid-sized undertakings are not required to prepare a full sustainability statement, yet they still receive questionnaires from customers, lenders, investors, insurers and procurement platforms. Those requests often use different definitions, periods and data formats. The Voluntary Standard is intended to create a stable common reference: one controlled information set that can be reused for several legitimate business needs without pretending that every recipient needs the same report.

The Standard also has a second, legal function. For certain requests made by undertakings subject to mandatory sustainability reporting under the Accounting Directive, protected value-chain undertakings obtain a limit on the information that can be required. That protection is important, but it should not dominate the reporting design. A useful implementation still begins with users, decisions, boundaries, source data and internal controls.

The delegated act describes two objectives. First, it provides a simple and standardised framework for undertakings that are not subject to mandatory sustainability reporting. Second, it limits the trickle-down burden created when mandatory reporters seek information from smaller value-chain partners. Annex I is the reporting standard. Annex II is the separate list of essential datapoints that constitutes the value-chain cap.

Article 2 of the delegated regulation permits undertakings not subject to mandatory reporting under Articles 19a and 29a to disclose voluntarily in accordance with Annex I. Annex I paragraph 2 further states that the Standard is intended for undertakings that do not exceed an average number of 1,000 employees during the preceding financial year. The footnote expressly includes self-employed persons, non-incorporated undertakings and listed micro-undertakings.

A straightforward user is therefore an undertaking outside mandatory reporting and within the stated 1,000-employee population. More complex cases require a documented scope review: a parent with a large consolidated group, an entity with more than 1,000 employees that remains outside mandatory scope for another reason, or a non-EU supplier seeking to use the framework voluntarily. These cases are not solved by reading a single threshold in isolation.

These uses can share a common evidence base, but they should not be collapsed into a single uncontrolled document. A public report may omit confidential detail that a lender receives under agreed permissions; a customer questionnaire may ask for a small subset; and an internal management pack may include operational detail that is not appropriate for external communication.

The Standard retains the modular architecture developed through VSME. The Basic Module contains disclosures B1-B11. It is the target approach for micro-undertakings and the minimum requirement for other undertakings. The Comprehensive Module adds C1-C9, which are more likely to be requested by banks, investors and corporate clients. Applying the Basic Module is a prerequisite for applying the Comprehensive Module.

Paragraph 25 also allows an undertaking that has completed B1-B11 to report selected disclosures from the Comprehensive Module. A prudent publishing approach is to describe those as supplementary disclosures while retaining Option A, unless the entire Comprehensive Module has been completed and reviewed. This avoids turning partial supplementation into an overstated Option B compliance statement.

Report information that is relevant, faithful, comparable, understandable and verifiable.

Add sector-specific or undertaking-specific information when the prescribed disclosures would not provide relevant and faithful information for the activities concerned.

Provide comparative information from the second reporting year, except for metrics reported for the first time.

Apply the “if applicable” principle only where a disclosure specifies the relevant circumstances; omission then signals that the item was not applicable.

Use a consistent reporting period with the financial statements where financial statements are prepared.

Maintain coherence and explain linkages with financial statements, including cross-references where useful.

Identify protected or seriously prejudicial information omitted under paragraph 22 and reassess the omission at each reporting date.

Document whether the report is individual or consolidated and list included subsidiaries when consolidated.

Figure 1. The Voluntary Standard converts controlled source data into audience-specific outputs; Annex II is a separate legal request limit.

The primary function of the report is to inform actual or potential business counterparties. If large undertakings or banks require annual updates, the report is prepared annually. The Standard permits public publication but does not make it mandatory. A public report can appear as a separate section of the management report or as a standalone document. Cross-references to information published in the same accessible document set can avoid duplication.

The cap applies only to information gathering for sustainability reporting under national law transposing the Accounting Directive. A protected undertaking is an undertaking in a reporting undertaking's value chain that does not exceed an average of 1,000 employees in the preceding financial year. For that purpose, the reporting undertaking may not require information beyond the voluntary-standard information specified in Annex II, and the protected undertaking has a statutory right to decline above-cap information.

The cap is not the complete Annex I report. Article 3 expressly states that it comprises only Annex II datapoints. It also does not create an obligation on the supplier to provide sustainability information. Requests for other purposes - such as separate due-diligence law, credit underwriting, procurement or voluntary commercial analysis - require their own legal and contractual assessment.

Figure 2. First-time user decision tree: applicability, intended population, reporting objective and module selection.

The company selects Option A for its first controlled report and adds a clearly labelled supplementary C3 disclosure on the GHG target it has formally approved. It does not claim Option B because C1-C9 are not complete. It creates a climate-risk workstream for the next cycle, records Scope 3 screening as an improvement action and gives the bank a controlled appendix explaining current data limitations. The public website receives only the approved core report; detailed lender assumptions remain in the finance pack.

Why this works: the module statement matches the content; the company does not confuse useful supplementation with complete Option B reporting; audience versions reconcile to one source register; and limitations are used to define an improvement plan rather than hidden behind generic wording.

Evidence needed: approved scope and module decision, entity list, reporting calendar, disclosure register, applicability decisions, omission record, data owner sign-offs, source files, calculation methods, reviewer log and board or management approval. The wording must be updated when the legal status changes.

As at 11 August 2026, the Commission had adopted the delegated regulation on 3 July 2026, but it was not yet in force because it had not been published in the Official Journal. Article 4 says it enters into force on the third day after publication, so the status should be rechecked against the Official Journal before use.

Yes—the Comprehensive Module is optional, and the Basic Module is its prerequisite. Paragraph 25 allows selected Comprehensive disclosures after B1–B11; this guide's LRA publishing approach labels them supplementary and retains Option A unless the full Comprehensive Module has been completed and reviewed.