Companies in Germany are increasingly asked to provide information about their sustainability efforts. Business partners, banks, and investors inquire about CO₂ emissions or the existence of a code of conduct for the supply chain. Small and medium-sized enterprises (SMEs) often face significant workloads as they fill out different questionnaires and repeatedly provide similar information. While many SMEs are not legally obliged to report on sustainability, they are increasingly confronted with information requests from their supply and value chains.

The "Voluntary Standard" (VS) aims to provide relief: This voluntary standard offers, for the first time, a uniform framework across Europe for voluntary sustainability reporting. The VS is designed to offer companies with up to 1,000 employees a proportionate and standardized way to provide sustainability information. Simultaneously, within the supply and value chains, the VS restricts the data inquiries of legally reporting companies to their non-reporting business partners. These limits will come into effect from 2027, following the publication in the European Union's Official Journal expected in autumn 2026. However, the standard can already be applied now.

A Practical Framework for SMEs

The VS is aligned with the European Sustainability Reporting Standards for larger companies, the "European Sustainability Reporting Standards" (ESRS). However, it is considerably simpler than ESRS and consists of two modules: The "Basic Module" captures key information on environmental, social, and governance topics. Building on this, the VS includes an "Additional Module" with more detailed information, such as strategy, climate risks, or human rights, which are often required by banks and investors. Companies can begin with the Basic Module and gradually expand their reporting.

Unlike standards for larger companies, the VS forgoes the double materiality analysis. Some disclosures are required only if they are genuinely relevant, ensuring voluntary reporting remains practical especially for smaller companies.

Limited Information Requests

The VS plays a crucial role in the so-called "Value Chain Cap." This cap limits the sustainability information legally reporting companies can demand from non-reporting companies in their value chain for their own reporting. Different requirements are defined for companies with up to ten employees compared to those with more than ten employees.

This restriction aims to mitigate the "trickle-down effect," where extensive legal reporting obligations are passed down the supply chain to non-reporting companies. The VS is intended to increase legal certainty and proportionality.

Acceptance Determines Relief

The German Chamber of Commerce and Industry (DIHK) sees broad recognition of the standard as critical for its success. Banks, investors, funding bodies, and public procurement agencies should adopt the VS as their shared reference framework for requesting sustainability information. If multiple individual questionnaires and additional data continue to be demanded, the desired standardization may not be achieved, and the burdens would persist.

Understanding the Standard Now

For many SMEs, sustainability information will play a role in financing and business relationships. The VS provides an opportunity to meet such requests on a standardized basis while reducing the effort needed for data collection.

To ensure the standard has the desired impact, it should be integrated into operational practice as soon as possible.