The VS (Voluntary Standard, formerly VSME) is becoming the common European reference for sustainability information requested from companies outside mandatory CSRD reporting. The European Commission adopted the delegated regulation establishing it on 3 July 2026. That adoption is a major milestone, but it is not the same as entry into force.
The act must first complete the scrutiny period of the European Parliament and the Council and be published in the Official Journal of the European Union. The regulation itself says that it will enter into force on the third day after publication. EFRAG has also made clear that the VS is not yet legally effective while that process remains open.
This distinction matters. Suppliers should prepare for the standard now, but they should not be told that they already have a new reporting obligation. Large companies should review their supplier questionnaires, but the legal limit is narrower and more precise than the claim that they can never request anything beyond the VS.
What changed from VSME to VS
EFRAG developed the original VSME as a voluntary sustainability reporting standard for non-listed SMEs. The Commission endorsed that work through Recommendation (EU) 2025/1710 in July 2025, providing companies with an interim reference while EU legislators completed the wider CSRD changes.
The Omnibus I Directive then required the Commission to establish sustainability reporting standards for voluntary use. The delegated regulation adopted on 3 July 2026 creates that formal Voluntary Standard. It remains closely aligned with VSME, but it has been adapted to the revised ESRS and to the legal protections introduced for undertakings in the value chain.
The change is therefore more than a shorter name. VSME was the technical and recommended starting point. The VS is the standard adopted under the legal mandate contained in the amended Accounting Directive. Once the delegated regulation enters into force, it will replace the 2025 recommendation as the operative European reference.
For clear communication, the safest first mention is VS (Voluntary Standard, formerly VSME). After that, the text can simply use VS. Existing URLs containing vsme do not need to change, because keeping established URLs protects search visibility and avoids unnecessary redirects.
Is the Voluntary Standard already law?
The precise answer is that the Commission has adopted the delegated regulation, but the regulation has not yet entered into force.
Under the Accounting Directive, a delegated act of this kind enters into force only if the European Parliament and the Council do not object during the scrutiny period. After that control and publication in the Official Journal, the VS regulation will become directly applicable according to its own entry-into-force clause.
The related value chain protections come from Directive (EU) 2026/470, which is already in force as an EU directive. However, Member States have until 19 March 2027 to bring into force the national measures needed to comply with the relevant provisions. This is another reason not to describe every element as already directly enforceable against every customer today.
The practical timeline is:
- 3 July 2026: the Commission adopted the delegated regulation establishing the VS.
- Later in 2026: scrutiny by the Parliament and Council, followed by publication if there is no objection.
- Three days after publication: the regulation is scheduled to enter into force.
- Financial year 2027: the delegated act states that it applies to value chain reporting by companies subject to mandatory sustainability reporting.
- 19 March 2027: deadline for Member States to transpose the relevant Omnibus I provisions.
Companies can use this period to map their data and contracts without presenting a future legal effect as if it were already fully operational.
Who can use the VS voluntarily?
The VS is designed for undertakings outside the mandatory sustainability reporting requirements that do not exceed an average of 1,000 employees during the preceding financial year. It is not limited to the traditional EU definition of an SME.
Using the standard remains voluntary for those undertakings. The legislation does not create a general duty for a protected supplier to produce a VS report, obtain assurance or hand over every datapoint in the standard. The amended Accounting Directive explicitly says that the value chain protection does not impose or imply an obligation on an undertaking in the value chain to provide sustainability information.
Voluntary does not mean irrelevant. A company may decide to use the VS because several customers request comparable data, because a lender needs sustainability information or because management wants a consistent baseline. A single structured dataset can be easier to maintain than a different spreadsheet for every counterparty.
The VS provides a common structure for that work. It covers general information and sustainability practices, together with environmental, social and governance metrics. Its modular and proportionate design is intended to make reporting feasible for companies with fewer resources than a large CSRD reporting group.
How the value chain cap actually works
The value chain cap protects undertakings with no more than 1,000 employees that sit in the value chain of a company required to report under the CSRD. The protected undertaking can use a self-declaration concerning its size, and the reporting company can rely on it unless it knows that the declaration is manifestly incorrect.
When a CSRD reporting company requests information from a protected undertaking for the purpose of sustainability reporting required by the Accounting Directive, the protected undertaking has the right to decline information exceeding the datapoints included in the cap. The delegated regulation identifies those capped datapoints in Annex II.
The reporting company must not use contractual arrangements for that CSRD reporting purpose to require information beyond the cap. If it still asks for additional information, it must identify what exceeds the standard and inform the protected undertaking of its statutory right to decline.
There are important boundaries:
- The cap applies to protected undertakings, not automatically to every supplier.
- It applies to requests made for CSRD sustainability reporting purposes.
- It does not prevent requests made for other purposes, including compliance with EU due diligence requirements.
- It does not force the protected undertaking to report under the VS.
- A reporting company should request less than the full capped set when it does not need every datapoint.
This means that “a customer can never ask for more than the VS” is too broad. A better formulation is: for CSRD reporting requests to protected value chain undertakings, the VS will define the legal reference level beyond which the undertaking has a right to decline.
What suppliers should prepare now
Preparation should start with data, not with a polished report. Most companies already hold part of the required information across finance, operations, human resources and procurement. The challenge is assigning owners, applying consistent definitions and retaining evidence.
1. Confirm whether you are protected
Document your average employee count and your position in the requesting company’s value chain. Be ready to provide a clear self-declaration when the protection applies.
2. Map the VS datapoints
Compare the standard with the questions you already receive. Identify information on energy, greenhouse gas emissions, pollution, biodiversity, water, resource use, workforce and business conduct. Mark which data exists, who owns it and how frequently it can be updated.
3. Build an evidence trail
An answer is more useful when it can be traced to invoices, meters, payroll records, waste documentation or approved policies. Automated data collection helps turn those source records into reusable reporting data.
4. Separate legal scope from commercial choice
A customer may request additional information for a different legal or commercial purpose. Ask it to identify the purpose and the applicable basis. Then decide whether to provide the information voluntarily rather than assuming that every extra question is prohibited.
5. Reuse the same data
The objective is not another isolated questionnaire. A structured carbon footprint and a consistent workforce and resource dataset can support the VS, customer requests and other frameworks without repeating collection from zero.
What CSRD reporting companies should change
Large reporting groups should begin by inventorying the questionnaires sent by sustainability, procurement, compliance and risk teams. Duplicate requests often arise because each function collects similar information under different labels.
Classify each question by purpose. Questions needed for CSRD value chain reporting should be mapped against the Annex II cap. Questions used for due diligence, product compliance, lending or a voluntary supplier programme should be documented separately, with their own basis and explanation.
Supplier communications also need to change. A protected undertaking should be able to understand why information is requested, which part is required for CSRD reporting and whether any question exceeds the capped set. Clear purpose labels will reduce disputes and make responses more comparable.
Finally, design the process to accept estimates where the reporting rules allow them. The amended Accounting Directive recognises that not all value chain information will always be available and provides for the use of estimates as appropriate. A longer questionnaire is not automatically a better reporting control.
Companies building their reporting process can use the CSRD resource hub to connect supplier data requests with materiality, emissions and disclosure requirements.
A practical VS readiness plan
The most useful approach is a shared data model with two views: one for the protected supplier and one for the reporting company.
For suppliers, start with a gap assessment, assign owners and collect evidence for the information that can be requested within the cap. Prepare a standard response explaining company size, reporting period, methodologies and unavailable information. Do not promise assurance or completeness that the VS does not require.
For CSRD reporting companies, remove duplicate questions, label the legal purpose of each request and configure the questionnaire so protected undertakings are treated differently. Establish a process for handling additional requests and for informing suppliers of their right to decline when the law requires it.
Both sides benefit from consistent definitions and reusable evidence. Dcycle connects operational sustainability data with reporting frameworks, allowing the same verified information to support the VS, CSRD and other reporting needs. If you want to assess your supplier data process before the 2027 application period, request a demo.
Do you supply large companies? Use our practical Spanish guide to understand the VS, the value chain cap and the data you should prepare.
View the supplier guideFrequently asked questions (FAQs)
Has VSME been renamed VS?
The standard adopted by the Commission is called the Voluntary Standard, or VS. It is based directly on EFRAG's VSME work, so the clearest first reference is “VS (Voluntary Standard, formerly VSME)”.
Did the VS become legally effective on 3 July 2026?
No. The Commission adopted the delegated regulation on that date. It still needs to complete parliamentary and Council scrutiny and be published in the Official Journal before it enters into force.
Does a supplier have to produce a VS report?
No. Use of the VS remains voluntary for undertakings outside mandatory CSRD reporting. The value chain provisions do not create a general obligation for a supplier to provide sustainability information.
Can a CSRD company ask a supplier for information beyond the VS?
For a CSRD reporting request to a protected undertaking, the undertaking has a right to decline information beyond the capped datapoints. Requests for other purposes, including certain due diligence requirements, are not covered by that specific limit.
Which companies are protected by the value chain cap?
The protection covers undertakings in the reporting company's value chain that do not exceed an average of 1,000 employees during the preceding financial year.