The European Commission has developed the Voluntary SME Sustainability Reporting Standard (VSME)—a proportionate, accessible framework designed specifically for small and medium enterprises to report on ESG performance without overwhelming administrative burden. Unlike complex reporting standards designed for large corporations, VSME uses a two-tier modular structure (Basic and Comprehensive modules) allowing SMEs to choose their reporting level based on capability and stakeholder expectations. Adoption reduces duplicate compliance requests from large partners, banks, and investors while enabling strategic decision-making and business efficiency gains.