Who Can Use the EU Voluntary Sustainability Reporting Standard?

A reporting team often begins with a simple question: “Are we below 1,000 employees?” That is necessary but not always sufficient. The answer can change depending on whether the analysis concerns the reporting entity, a consolidated group, a subsidiary, a non-EU supplier or a specific value-chain request. It can also depend on national transposition of the Accounting Directive and the reporting period being tested.

A defensible eligibility conclusion therefore records the legal instrument, reporting level, relevant thresholds, employee calculation, group perimeter, preceding financial year, any exemption and the specific use being proposed. This record should be reviewed before the module statement is approved and again if the group changes through acquisition, disposal or restructuring.

The delegated regulation is designed for undertakings outside the mandatory sustainability-reporting requirements of Articles 19a and 29a. Directive (EU) 2026/470 amended the Accounting Directive so that, in general terms, mandatory reporting applies to undertakings that exceed both a net-turnover threshold of EUR 450 million and an average employee threshold of 1,000 during the financial year, with corresponding group-level provisions for parents. National transposition, legal form, exemptions and the precise reporting date still need to be checked.

Annex I paragraph 2 states that the Standard is voluntary and intended for undertakings that, on their balance-sheet dates, do not exceed an average number of 1,000 employees during the preceding financial year. A footnote confirms that this includes self-employed persons, non-incorporated undertakings and listed micro-undertakings. This wording deliberately reaches beyond the original SME framing of VSME.

Figure 1. Eligibility decision tree for mandatory scope, the intended employee population and complex cases.

The operative Article 2 says that undertakings not subject to Articles 19a and 29a may disclose voluntarily in accordance with the Standard. Annex I paragraph 2 says that the Standard is intended for undertakings that do not exceed 1,000 employees. Those formulations are not perfectly identical. An undertaking with 1,200 employees but turnover below the mandatory threshold may therefore be outside mandatory scope while also sitting outside the express intended population in Annex I.

A cautious approach is to avoid presenting such a case as routine eligibility. The undertaking should obtain legal and technical confirmation, explain why the Standard is relevant and proportionate to its characteristics, assess whether the module statement can be made without qualification and consider whether another reporting basis is more suitable. The existence of a commercial request alone does not resolve the source-text tension.

If an undertaking is a parent, Annex I paragraph 16 recommends preparing the sustainability report on a consolidated basis, including subsidiaries. Paragraph 17 states that subsidiaries included in the consolidated voluntary report are exempted from reporting under the Standard. B1 then requires the report to state whether it is individual or consolidated and, for a consolidated report, to list the included subsidiaries and their registered addresses.

The recommendation does not remove the need to define the group boundary. Teams should reconcile the sustainability perimeter with financial consolidation, identify acquisitions and disposals, decide how newly acquired entities enter the reporting period and document any data-boundary differences for specific metrics. They should also avoid assuming that a parent-only headcount is the correct eligibility measure where the report is consolidated. The adopted text does not provide a full group-threshold methodology for every voluntary case, so mixed-group situations require judgement and review.

Figure 2. Entity and group eligibility matrix: reporting use, consolidation and controls.

A subsidiary included in a parent's consolidated voluntary report is exempted from reporting under the Standard. That is an internal reporting architecture rule, not a guarantee that the subsidiary will never receive requests. A local customer may need site information, a bank may lend directly to the subsidiary, or national law may require specific disclosure. The group should therefore maintain subsidiary-level source data and a controlled way to issue local extracts without creating contradictory standalone reports.

The 2026 text introduces an additional proportionality layer for undertakings with 10 employees or fewer. Specified datapoints - particularly several environmental, climate, strategy and human-rights items - are marked as voluntary for those undertakings. Annex II separately identifies which datapoints form the cap for ≤10 and >10 employee protected undertakings.

The relief is not permission to describe missing information as “not applicable”. The report should distinguish: a datapoint that is voluntary because of the ≤10 employee rule; a datapoint that is conditionally inapplicable; a datapoint omitted under the protected-information provisions; and a datapoint not reported because the selected module does not include it. Those statuses have different meanings for users and software.

A non-EU supplier can choose to organise and communicate sustainability information using the Voluntary Standard if its customers, lenders or investors accept the framework. The Standard can be commercially useful because it provides a common EU-market vocabulary. However, voluntary usability and EU statutory protection are different questions.

The protected-undertaking right arises from the Accounting Directive framework and a qualifying request by a reporting undertaking. Whether a particular non-EU supplier can invoke that right, which law governs the request and contract, and how national transposition applies require legal analysis. A report should therefore avoid saying that every global supplier automatically has an EU statutory right to refuse above-cap information.

Before the delegated regulation enters into force, an undertaking may continue using Recommendation 2025/1710 or may prepare against the Commission-adopted 2026 text as a transition basis. The key is transparency. The report should name the actual source, approval date and status, and should not say that the delegated regulation is already applicable. It should also include an update trigger for Official Journal publication and revalidate paragraph references before making a final compliance statement. After entry into force, voluntary use becomes available under Article 2; the statutory value-chain cap in Article 3 applies separately for financial years beginning on or after 1 January 2027.

Using employee count alone without checking mandatory entity or group scope.

Applying the current-year closing headcount when the text requires an average in the preceding financial year.

Treating the ≤1,000 intended-user threshold as identical to the protected-undertaking definition for every purpose.

Assuming a parent can use its own employee count while publishing a consolidated group report.

Calling a subsidiary “exempt” even though it was not actually included in the parent report.

Claiming EU refusal rights for a non-EU supplier without checking governing law and request purpose.

Using an unqualified Option B statement in a >1,000 employee grey-zone case.

Failing to reassess eligibility after acquisition, disposal, restructuring or threshold change.

Eligibility does not itself create a publication duty because Annex I describes the Standard as voluntary. An eligible undertaking can decide whether to prepare and communicate the information for its users, subject to any separate contractual or legal requirement.