For investment funds, aggregating and comparing ESG data across their portfolio companies is a constant challenge. For SMEs, the increasing pressure to report on sustainability can feel overwhelming.

In 2024, EFRAG launched the Voluntary Sustainability Reporting Standards for SMEs (VSME) — a framework designed to be simple, efficient, and, above all, aligned with the CSRD.

This standard lays the groundwork for transparent, comparable, and credible reporting, creating a common language between funds and portfolio companies.

For Investment Funds:

  • Standardization and comparability: Makes it easier to gather consistent metrics across the portfolio and make more informed decisions.
  • Higher valuation at exit: A solid and verifiable ESG report enhances attractiveness and valuation in a sale.
  • LP attraction: Meets the growing demand from investors for transparency and a sustainable focus.
  • SFDR PIAs: Simplifies the collection of data required for SFDR mandatory indicators.

For Portfolio Companies (SMEs):

  • Efficiency and resource savings: Provides a clear roadmap to produce a high-value report without excessive effort.
  • Competitive advantage: Strengthens market positioning and improves access to sustainable financing.
  • Better communication with investors: Enables a transparent, data-driven dialogue with the fund.

If you haven’t seen it yet, EFRAG has published an Excel template that guides data collection and allows conversion to the digital XBRL format — a key step in the new era of sustainability reporting.

Check out the standard here: [EFRAG VSME]
And the digital template here: [EFRAG Template]

In short, the VSME standards act as a bridge between a fund’s oversight needs and an SME’s operational capacity — a practical solution for a complex challenge.

At ILV SILVER | Deal & Business Advisory, we help funds and portfolio companies continuously improve.
Learn more at:https://www.ilvsilver.com/es/financiero/asg-impacto/

Victor Manz
Director of ESG & Impact – SFDR, CSRD, Assurance

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