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Climate Reporting

Introduction to climate- and sustainability reporting

The VSME standard: simpler sustainability reporting for small enterprises

See what the newly launched VSME standard includes and how it can help your small or medium-sized business save money, strengthen your brand, and give investors, customers and lenders exactly what they’re looking for.

Requirements for transparency around how companies treat the environment and their employees are becoming increasingly stringent. It is no longer only large corporations that are scrutinised – small and medium-sized enterprises (SMEs) must also demonstrate what they stand for. Investors, customers, lenders and large clients expect facts to be put on the table.

This is where the voluntary standard for sustainability reporting for small and medium-sized enterprises (VSME) comes into play. It is designed to help smaller businesses communicate their sustainability efforts – without drowning in paperwork or complex technical language.
The VSME standard was submitted by the EU’s standard-setting body EFRAG to the European Commission on 17 December 2024. We expect the standard to be formally adopted by the Commission in the near future and to be implemented in Norway in a similar way to CSRD, which has already been incorporated into the Accounting Act. VSME is also compatible with the data standard underpinning CSRD, ensuring that information is as comparable as possible across companies.

In this article, we explain the VSME standard in a clear and accessible way. We take a closer look at one of the most important areas in particular – B3: Energy and greenhouse gas emissions. You do not need a team of consultants or weeks of heavy work to get started. There are tools available (such as NSRS and Ducky Climate Reporting) that help you collect data, perform calculations and publish a report that is both robust and easy to understand – without costing a fortune.

Why the VSME standard?

The VSME standard has been developed to give smaller businesses a clear path to high-quality sustainability reporting, turn sustainability into a competitive advantage, and reduce the burden created by today’s situation where different stakeholders demand different information. It is about demonstrating that your supply chain does not harm the environment, that employees are treated fairly, and that your business is not driven solely by short-term profit.

For small companies, time and money are often scarce resources. Large, expensive ESG reports are simply not feasible. The VSME standard strips away unnecessary complexity and helps you focus on what truly matters. This makes it easier to meet the expectations of larger customers and lenders who are increasingly asking for more transparency.

How is the standard structured?

The VSME standard consists of two modules:

Basic module: A good starting point for the smallest companies or for the first reporting year. It covers essential topics such as energy consumption and working conditions.
Comprehensive module: For companies that want to go further. This module provides a more detailed picture of the company’s environmental and social footprint.

All information must be relevant, honest, comparable, understandable and verifiable. The goal is to provide an open and transparent view of how your business operates.

What does the Basic Module contain?

The basic module covers a range of topics, each with its own code:

B1 – Basis for reporting: How the report is structured.
B2 – Policies, practices and future plans: Current sustainability measures and plans going forward.

Environmental topics:

B3 – Energy and greenhouse gas emissions: The main focus of this article.
B4 – Pollution: Emissions to air, water and soil.
B5 – Biodiversity: Your impact on plants and wildlife.
B6 – Water: Consumption and management.
B7 – Resource use and waste: How materials and waste are handled.

Social topics:

B8 – Workforce: Who works for you, employment types and diversity.
B9 – Health and safety: Measures to protect employees.
B10 – Pay, negotiations and training: How employees are developed and rewarded.

Governance and ethics:

B11 – Corruption and bribery: Ensuring business is conducted with integrity.

Focus on B3: Energy and Greenhouse Gas Emissions

Why is B3 so important? Because climate change is a major global challenge, and energy use and greenhouse gas emissions are at the core of the problem. Even small businesses contribute. B3 helps you understand how much energy you use, how large your emissions are, and where improvements can be made. With these figures, you can make smarter decisions, reduce costs and document that you take climate responsibility seriously.

What is measured?

Total energy consumption: Electricity, fuel for production and transport, including a breakdown of renewable versus fossil energy.
Direct greenhouse gas emissions (Scope 1): Emissions from sources you own or control, such as a gas-fired oven in production or a diesel-powered delivery van.
Indirect greenhouse gas emissions from purchased energy (Scope 2): Emissions from purchased electricity and district heating, where the emissions occur outside your own operations.
Emission intensity: Emissions per unit (for example per million NOK in revenue) to track improvements over time and compare performance.

An example: from nut roasting to energy savings

Imagine you run a small snack company that roasts nuts. You have electric ovens, one gas oven and a delivery van.

Total energy consumption:

Electricity: 100 MWh (100% renewable with guarantees of origin)
Natural gas: 50 MWh
Diesel: 10 MWh

Greenhouse gas emissions:
You calculate emissions from gas and diesel and end up with 50 tonnes of CO₂ equivalents.
In this case, electricity results in zero emissions.

Emission intensity:
If your turnover is NOK 10 million, your emission intensity is 5 tonnes of CO₂e per million.
Next year, you might choose greener energy sources or a more fuel-efficient vehicle. The number should then decrease, demonstrating real improvement.

Why working with B3 pays off

Measuring energy use and emissions is not just about pleasing environmentally conscious customers. It can also reduce costs. You might switch to LED lighting, adjust production schedules or upgrade transport solutions. The result? Lower bills, reduced emissions and a stronger brand.

Your customers are not naïve – they recognise greenwashing when they see it. Quantified targets and real results build credibility. This makes it easier to secure loans, win larger contracts and stay ahead of new requirements and regulations.

No need to panic – tools are available

Reporting can seem complicated, but there is no need to worry. Tools – including ours – guide you through the entire process. You do not need to dig out every electricity bill or perform manual calculations. Simply follow the instructions, enter the figures and, just like that, you have a report that complies with the VSME standard.

With the right tools, reporting does not become a repetitive annual burden. Instead, it becomes a useful management tool. You can track progress, identify inefficiencies and plan effective improvement measures. It becomes more than just a report – it becomes your roadmap to a smarter, greener business.

Why this matters

The VSME standard exists because the world is changing. Ignoring sustainability can cost you customers, financing and, in the worst case, your business itself. This standard gives SMEs a simple, step-by-step way to meet new expectations.

It also helps prevent greenwashing. With a shared standard, everyone knows what counts and what does not. This builds trust – with lenders, investors, large customers and all other stakeholders you need to convince.

At the same time, it is an opportunity to run a better business. If you have never measured energy use and emissions before, you may be missing easy wins. Perhaps warehouse lights are left on all night for no reason. Perhaps valuable materials are being discarded instead of reused or recycled. The data you collect can highlight improvements that strengthen competitiveness and deliver real savings.

From insight to action

Once you know the numbers, you can set targets. Should you cut emissions by 10%, increase the share of renewable energy, or reduce water consumption? Track progress and let next year’s report demonstrate improvement. That is the essence of sustainability reporting.

Use a tool that makes it easier

We know time is limited. That is why we have developed a tool that simplifies the process. Enter the figures and we take care of calculations, formatting and guidance. This removes the headache and gives you a clear, credible report. Over time, you will see the benefits in the form of reduced costs, a stronger reputation and better relationships with stakeholders who value transparency and genuine effort.

Ready to get started?

You have a choice: wait until reporting is imposed on you under time pressure, or start now on your own terms. By adopting the VSME standard, you show that you understand where things are heading and that you are keeping pace in a world where sustainability and business performance go hand in hand.

Your next steps:

Review the basic module and identify which data you already have
Start with B3 – this is the area everyone is watching. Gather energy and fuel data and enter them into a tool
Gradually expand to other areas and aim to cover the full basic module within a defined timeframe
Implement improvements based on your findings – reduce energy use, cut waste and take care of your people
Share the results to show customers, investors and others what kind of business you run

Now is the time to show that you do not just talk about sustainability – you act on it. The VSME standard makes the task manageable, and with the right tools you can create positive change without losing sleep. Let’s get started.