Is the VSME still called the VSME?

The EFRAG VSME has been adopted into EU law as the Voluntary Sustainability Reporting Standard, shortened to VS, through Commission Delegated Regulation (EU) 2026/1560. Many people still say VSME, and the content is based on the original EFRAG standard.

What is the VSME value chain cap?

It is a limit on what companies reporting under the CSRD can require from value chain partners with an average of no more than 1,000 employees. Requests for CSRD reporting cannot go beyond the datapoints listed in Annex II of Delegated Regulation (EU) 2026/1560.

When does the value chain cap apply?

The regulation applies the cap from financial years beginning on or after 1 January 2027. The delegated regulation was published in the Official Journal on 21 September 2026.

Does the VS require Scope 3 emissions?

No. The Basic Module disclosure B3 asks for Scope 1 and location-based Scope 2 emissions. Scope 3 appears in the Comprehensive Module as a metric a company may choose to report.

Can large companies still ask suppliers for more than the VS?

They can ask, but protected suppliers can decline. Under Omnibus I, a reporting company asking for more must tell the supplier which information goes beyond the cap and that it may refuse. Requests for other purposes, such as due diligence, sit outside the cap.

Does the value chain cap affect UK companies?

Indirectly. UK suppliers to EU groups in CSRD scope will receive requests shaped by the VS, and UK groups whose EU operations are in scope must respect the cap when collecting data from their own suppliers.

VSME is now the VS: what the value chain cap means for large companies collecting supplier ESG data

From 2027, CSRD reporters cannot ask suppliers with up to 1,000 employees for more than the VS covers. Here is what to change in your supplier requests.

October 27, 2026

VSME is now the VS: what the value chain cap means for large companies collecting supplier ESG data

The VSME is now the VS, and it comes with a value chain cap. From financial years beginning on or after 1 January 2027, CSRD reporters cannot require suppliers with an average of no more than 1,000 employees to provide more than the standard's listed datapoints. For large companies, that changes how supplier ESG data gets collected.

What actually changed in September 2026

The Omnibus I directive, Directive (EU) 2026/470, was published in the Official Journal on 26 February 2026. It narrowed the CSRD to EU companies with at least 1,000 employees and at least 450 million euros of net turnover, from financial years beginning in 2027. It also introduced the value chain cap and asked the Commission to set the standard that defines it.

That standard arrived as Commission Delegated Regulation (EU) 2026/1560, adopted on 3 July 2026 and published in the Official Journal on 21 September 2026. EFRAG's VSME, the voluntary standard for SMEs first published in December 2024, has become the Voluntary Sustainability Reporting Standard, shortened to VS. The rename makes sense. It now covers companies up to 1,000 employees, which is a long way past anyone's definition of an SME.

Legal basis: Delegated Regulation (EU) 2026/1560, supplementing the Accounting Directive.
Who is protected: value chain partners with an average of no more than 1,000 employees in the preceding financial year.
Who is restricted: companies subject to mandatory CSRD reporting.
What the cap covers: only the datapoints listed in Annex II of the regulation.
When it applies: financial years beginning on or after 1 January 2027.
Structure of the standard: a Basic Module (B1 to B11) and an optional Comprehensive Module (C1 to C9).

What is in the VS, and what is not

The Basic Module covers the basis of preparation, sustainability practices and policies, energy and greenhouse gas emissions, pollution, biodiversity, water, resource use and waste, three workforce disclosures and convictions for corruption or bribery. The Comprehensive Module adds strategy, GHG reduction targets, climate risks, human rights and gender diversity in the governance body.

The part that matters most for carbon teams is B3. It asks for Scope 1 and location-based Scope 2 emissions. Scope 3 is not a required metric. The Comprehensive Module treats it as something a company may choose to report. Micro-undertakings with ten or fewer employees can also treat several environmental datapoints, including the emissions figures, as voluntary.

A word of caution. The cap is defined by Annex II, which lists the datapoints that make up the ceiling and separates the list for companies above and below ten employees. If you are redesigning a supplier questionnaire, read Annex II itself rather than a summary of it, this one included.

Why this is good news for large companies

In my experience, supplier data is the worst job of the sustainability year at a large company. Teams send long questionnaires, get a fraction back, and fill the gaps with spend-based estimates. Suppliers, meanwhile, receive a different questionnaire from every customer and answer the ones attached to the biggest contracts.

The cap ends some of that. It will feel like a restriction for the first reporting cycle, and then it will feel like a relief. A single, published standard means suppliers can produce one VS report and send it to every customer who asks. On a sales call last week, the ESG director of a UK accountancy firm described SME clients arriving with a tender or a customer questionnaire and asking what they are meant to do next. A VS report is a good answer to that question, and it is the answer large companies should want their suppliers to give.

There is a catch for Scope 3. The GHG Protocol's most accurate method for purchased goods and services relies on product-level emissions data from suppliers. The VS does not ask for that, and Scope 3 is optional within it. So for the many suppliers under 1,000 employees, the realistic data you can rely on is their Scope 1 and Scope 2 figures plus their energy use. That points most large companies towards a hybrid Scope 3 method: VS data where suppliers provide it, secondary data for the rest, and better data from the handful of strategic suppliers who are willing to go further.

What I would do now

Segment your suppliers by headcount. You need to know which suppliers are protected by the cap before you send anything for your 2027 reporting year.
Rebuild your supplier request around the VS Basic Module. Ask for what the standard covers, in the format suppliers will already be preparing. If you ask for more, the directive requires you to tell suppliers which parts go beyond the cap and that they may decline.
Accept a VS report as an answer. If a supplier sends one, map it into your data rather than asking them to retype it into your portal.
Keep requests for other purposes separate. The cap applies to information requested for CSRD reporting. Due diligence and contractual requests sit outside it, so label which is which.
Track your spend-based share. Measure what share of your Scope 3 rests on spend-based estimates and set a target to reduce it each year.

The UK angle

None of this is UK law. It still reaches UK businesses in two directions. UK companies that are subsidiaries of, or suppliers to, EU groups in CSRD scope will receive VS-shaped requests. And UK groups with large EU operations that fall into scope will have to respect the cap when they ask their own suppliers for data. If you already report under SECR and CDP, much of the B3 data is something you collect anyway. Our CDP reporting guide covers how that data feeds CDP.

Where software helps

The cap shrinks the questionnaire. It does not shrink the chasing. Someone still has to send a few hundred requests, follow up, read the PDFs that come back and check that the Scope 2 figure is in tonnes and covers the right year. That is where most of the time goes, and it is what our guide to ESG data collection software covers in detail.

If you are on the receiving end as a supplier, our post on how to respond to a supplier sustainability assessment when you have no ESG data is a practical starting point. And if Scope 3 is the reason you are reading this, our piece on Scope 3 data work explains how an agent can take on the collection.

Ella is ESG reporting software built as an agent. It can prepare a VS report for a supplier, or send VS-based requests to hundreds of suppliers, chase them by email, read the documents they upload and keep the source behind every number.