Quick Summary
What this guide covers:
- What the VSME ESG reporting standard is and why it matters for SMEs
- How Kube ESG, developed by Febelfin and Isabel and built using Karomia’s technology, simplifies ESG data collection and sharing
- The costs vs benefits of adopting VSME (based on EFRAG data)
- VSME report examples and commercial advantages
- How Karomia’s ESG tool automates ESG reporting
✅ For SME CFOs, sustainability leads, and business owners preparing for ESG reporting.
What Is ESG Reporting and Why It Matters for SMEs in 2025?
For SMEs, ESG reporting in 2025 has become a prerequisite for doing business. Banks, investors, insurers, and major buyers now require sustainability data to assess risk and compliance. According to EFRAG, nearly 43.4% of medium-sized enterprises already receive ESG data requests, a number expected to reach 100% by 2028.
Without a common standard, SMEs spend up to €7,100 per request, costing the EU SME ecosystem €12 billion annually, projected to reach €27 billion by 2028.
The ESG Challenge for SMEs: Why ESG Reporting Requests Are Rising
Why are SMEs being asked for ESG data?
Large companies subject to CSRD and ESRS need ESG information from their suppliers to meet their own reporting requirements. Even non-listed SMEs must now provide sustainability data to remain eligible for financing, supply-chain participation, and tenders.
“As a bank, we take our social responsibility seriously. We need insight into our customers’ sustainability risks, they affect our credit portfolio.” — Philippe Wallez, Head of ESG, ING (Kube ESG assists SMEs with sustainability reporting, Aug 2025)
VSME Reporting Explained: The EU’s Unified ESG Solution for SMEs
What is the VSME standard by EFRAG?
The Voluntary Sustainability Reporting Standard for Non-Listed SMEs (VSME), developed by EFRAG, offers a proportional ESG framework aligned with CSRD principles. It helps SMEs disclose sustainability data without the burden of full ESRS reporting.
👉 Read our VSME Standard for SMEs: A Practical Guide for a complete overview.
Modules:
- Basic – 11 core disclosures (Scope 1–2 GHG emissions, energy use, workforce data).
- Comprehensive – adds 9 advanced disclosures (ESG strategy, transition plans, value-chain incidents).
The Basic module suits first-time reporters, while the Comprehensive module is ideal for SMEs engaged with banks, investors, or supply-chain partners demanding deeper ESG data.
Why Acting Now Matters: ESG Reporting Deadlines and Kube ESG Launch
Market momentum: 2025–26
- Banks & corporates standardizing requests – By 2026, ESG questionnaires will follow harmonized VSME formats.
- Kube ESG launching now: Developed by Febelfin and Isabel Group, and built with Karomia’s technology, Kube ESG aligns directly with the VSME standard.
“Kube ESG contains a standardised questionnaire aligned with the VSME standard. Completing it helps SMEs measure and share their impact in a simple, uniform way.” — Philippe Wallez, ING, Aug 2025
- Questionnaire flood expected in Q2: As banks and corporates adopt Kube ESG, ESG data requests will multiply, but SMEs with a VSME report can respond instantly.
How to prepare for ESG reporting using VSME
- Assess your ESG data and identify gaps.
- Draft your 2024 VSME report.
- Upload to Kube ESG to test data-sharing and feedback.
- Finalize before 2026 to qualify for financing and tenders.
Costs vs Benefits of VSME Reporting for SMEs
Setup vs maintenance (Year 1 heavier, then ~50% drop)
Year 1 costs reflect setup and familiarization with the standard. From Year 2 onward, total costs drop by roughly 50% due to reusable data, automation, and reduced consultancy time.
Benefits Quantified: What SMEs Really Gain from VSME Reporting
Let’s look at a real-world scenario showing how the VSME standard helps SMEs cut costs, unlock financing, and win more business.
Case Study: turning ESG from admin to advantage
A 50-person Belgian manufacturer was juggling multiple ESG requests, from its bank, two large buyers, and an insurance partner. Each request took days to complete and cost around €7,000 in internal time and consultant fees.
In 2025, the company adopted the VSME Comprehensive Module and used Karomia’s ESG tool to generate its first standardized report. Within weeks, results followed.
1. Faster, cheaper financing
Using its VSME report, the company shared verified data directly through Kube ESG - the new Febelfin–Isabel platform built using Karomia’s technology.
That single upload replaced multiple questionnaires and qualified the firm for an ESG-linked loan with a 15 bps rate reduction, saving roughly €3,000 per year.
Across Europe, EFRAG projects SMEs adopting VSME could collectively save €582 million annually in financing costs by 2028.
2. Staying on supplier lists (and winning new ones)
One client had started requiring ESG documentation through EcoVadis. The VSME report covered every question in that survey, ensuring seamless compliance - no extra paperwork.
The company kept its key contract and won a new tender from a large food group that recognized VSME-aligned reporting as a valid sustainability credential.
According to EFRAG’s Cost–Benefit Analysis, VSME-aligned SMEs could see supplier-chain profit gains of €3.5 billion in 2025, doubling to €7.1 billion by 2028.
3. Less admin, more strategy
With Karomia’s ESG Library consolidating past disclosures and documents, ESG prep time dropped from 60 mandays a year to less than 10.
Instead of chasing spreadsheets, managers now focus on using ESG insights to optimize operations, like identifying inefficient suppliers and reducing waste-management costs.
Bottom line:
- Setup cost (Year 1): ~€20,000
- Ongoing cost: ~€9,000 annually
- Savings: €3–5k per year in financing
- New business: +15–20 % supplier growth
- Admin reduction: –80 % (60 → 10 mandays)
(Sources: EFRAG, Cost–Benefit Analysis on VSME, 2025; ING, Kube ESG assists SMEs with sustainability reporting, Aug 2025.)
How Karomia’s VSME Tool Simplifies ESG Reporting
For many SMEs, the challenge isn’t deciding whether to report, it’s finding a way to do it efficiently without a sustainability department. That’s exactly the gap Karomia fills.
The Karomia ESG platform automates VSME reporting in under a week. It fills disclosures, consolidates documentation, and integrates seamlessly with Kube ESG for digital data-sharing, making ESG reporting fast, affordable, and compliant.
How to create a VSME report with Karomia
- Upload existing financial and ESG documents.
- AI fills VSME disclosures automatically.
- Review and finalize with guided recommendations.
- Export or share via Kube ESG or directly with stakeholders.
Karomia’s solution transforms a 40–80 manday process into a 5-day workflow. SMEs can achieve full VSME compliance without hiring ESG consultants, saving both time and cost.
👉 Learn more:
One VSME Report, Infinite ESG Advantages
SMEs should adopt the VSME standard because one VSME report covers all stakeholder requests, reducing costs, saving time, and unlocking better financing and procurement access.
“SMEs that integrate ESG into their strategy will be more sustainable in the long term, also in terms of their financial results.” — Philippe Wallez, ING, Aug 2025
With tools like Kube ESG and Karomia, SMEs can turn compliance into a strategic advantage.
👉 Start your VSME journey today and secure your place in the sustainable economy of tomorrow.
