Letter of intent for simplest possible sustainability reporting for SMEs

Twelve industry and professional associations, including the German Engineering Federation VDMA, are advocating for a standardised, digitally driven solution for sustainability reporting for small and medium-sized enterprises (SMEs). In a letter of intent titled “Establishing an EU-wide digital solution for standardised sustainability reporting”, they are asking the European Commission, the European Parliament and EFRAG to make the implementation of the EU’s Voluntary Sustainability Reporting Standard for SMEs (VSME) as practical as possible for companies.

The risk: Parallel support approaches within the EU

The VSME helps companies meet growing requirements from supply chains as well as from banks and business partners. In practice, however, it is becoming apparent that the standard alone is not sufficient. Without a coordinated digital support structure at EU level, there is a risk that differing national approaches will develop in parallel – which will hamper the efficient flow of ESG data across the EU single market. A shared digital infrastructure would create a standardised platform for sustainability reporting and make it easier for companies to collect their VSME data just the once but use it multiple times.

A way forward: One-stop shop for sustainability reporting

The proposed EU platform should serve as a central portal for reporting requirements around sustainability. Initial approaches to this already exist: the German Sustainability Code (DNK), for one, provides an established platform through which businesses can create, manage and share their sustainability reports digitally. An EU-wide solution could build on such existing systems and develop them further. The ultimate aim is a platform that enables standardised reporting, central storage and release of ESG data, while at the same time allowing for national adjustments.

Practical benefits for SMEs: Efficient sustainability reporting

A homogeneous platform can save a great deal of time and effort in reporting and noticeably improve the quality of the data. At the same time, it simplifies communication with banks and business partners, because the information provided is standardised. In addition, a central VSME database creates a basis for providing and utilising ESG data. Companies can store their information in a structured way and share it selectively when needed.

Data is recorded once and used multiple times
Queries from external stakeholders can be answered more quickly

DNK blueprint: Using an existing reporting solution

The planned EU solution should build on established systems like the platform of the German Sustainability Code (DNK). One of the most developed publicly supported reporting tools in Europe, the DNK platform is already used by more than 4,700 companies for their sustainability reporting. The letter of intent suggests: “Integrating the DNK’s digital reporting tool and database into a joint EU framework would enable the European Union to utilise existing public investments and expertise to avoid duplicate work and accelerate the rollout of the VSME in all member states through EU co-financing.” It goes on to propose a joint European platform architecture with consistent basic principles that can be adjusted to country-specific requirements.

BMWE open to the idea in principle

The German associations behind the letter have signalled their willingness to contribute to such a solution – with the aim of turning sustainability reporting into a strategic asset for SMEs. The Federal Ministry for Economic Affairs and Energy (BMWE), too, is fundamentally open to the idea of an EU-wide platform, provided it offers clear advantages over existing national offerings and taps into synergies. Gitta Connemann, Parliamentary State Secretary at the BMWE and Federal Government Commissioner for SMEs, emphasised at the launch event for the DNK’s VSME module in March 2026 that sustainability reporting for companies must not involve excessive red tape if the measures are to be accepted and companies are to remain competitive.

“The DNK – and this is why we, the BMWE, are behind it – translates the spirit of Carlowitz for our times. Makes it manageable, not overwhelming. Gives us clarity, not small print. Structure instead of red tape. Guidance instead of confusion (...) This is where the DNK project is doing truly excellent work.”

Gitta Connemann | Parliamentary State Secretary at the BMWE and Federal Government Commissioner for SMEs | March 2026

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Sustainability reporting: EU-wide digital platform aims to simplify VSME reporting

German organisations are calling for a standardised digital solution for sustainability reporting by small and medium-sized companies – to improve comparability and minimise duplication.