EU CSRD and ESRS LSME and VSME reporting for SMEs

LSME was the original CSRD track for small and medium-sized undertakings, except micro-undertakings, whose securities were admitted to trading on an EU regulated market. The original framework allowed those undertakings to report specified SME information under proportionate standards. Directive (EU) 2026/470 removed listed-SME status as a standalone trigger from financial years beginning in 2027, so LSME now describes the earlier framework rather than a current route for every listed SME.

VSME is voluntary. Commission Recommendation (EU) 2025/1710 gives undertakings outside mandatory CSRD reporting a proportionate format for answering sustainability information requests. It is distinct from the Article 29ca voluntary standard that the Commission adopted on 3 July 2026.

The opt-out is part of the original listed-SME framework. The 2022 CSRD text allowed relevant small and medium-sized public-interest undertakings, for financial years starting before 1 January 2028, not to include sustainability information in the management report if they briefly explained why.

Do not apply that historical rule without the later amendments. Directive (EU) 2025/794 postponed the listed-SME application date, and Directive (EU) 2026/470 then removed listed-SME status as a standalone scope trigger from 2027. A current conclusion must use the amended thresholds and applicable national law.

A non-listed SME should use VSME as a voluntary response framework, not as a new mandatory CSRD obligation. The Commission says the voluntary standard is intended to reduce administrative burden by helping SMEs respond to sustainability information requests from large companies and financial institutions that are themselves subject to mandatory CSRD reporting.

Choose the module before collecting data. Under Commission Recommendation (EU) 2025/1710, the Basic Module contains B1 to B11 and covers general information plus environmental, social and business-conduct metrics. The Comprehensive Module adds information commonly requested by banks, investors and corporate customers and can be used only with the Basic Module. Once selected, a module is applied in full, while individual disclosures are provided only when they apply to the undertaking's circumstances.

Use the chosen module to standardize the SME's answers, keep repeatable evidence behind them, and avoid bespoke questionnaires expanding beyond what is proportionate for an SME. The Commission also encourages large companies and financial institutions seeking sustainability information from SMEs to base requests on the voluntary standard as far as possible.

Do not mix the two tracks. For a financial year governed by the original listed-SME transition, a listed SME needs a scope analysis covering the temporary opt-out and the standards then applicable. For financial years beginning in 2027, apply Directive (EU) 2026/470 instead: listing status alone is no longer a scope trigger. A non-listed SME outside mandatory scope usually needs a voluntary reporting and customer-request strategy, not a statement that CSRD directly applies to it.

Do not treat Commission Recommendation (EU) 2025/1710, an EFRAG draft, and the Article 29ca delegated standard as interchangeable. The Commission adopted C(2026) 5011 final on 3 July 2026. Confirm the delegated regulation's scrutiny, Official Journal publication, entry into force, and applicable annex before treating it as the controlling standard.