EFRAG makes sustainability reporting easier for SMEs
Earlier this week the European Financial Reporting Advisory Group (EFRAG) launched an exemplar digital toolkit that’s tailor-made for small businesses: an Excel-based VSME Digital Template, a new XBRL taxonomy, and a handy open source converter to make it all machine-friendly. Built for SMEs with fewer than 250 employees, these tools support the Voluntary Sustainability Reporting Standard for SMEs (VSME), and they’re designed to be intuitive, not intimidating.
The Excel-based digital template is smart enough to know what you need to disclose (and what you don’t), complete with interactive checkboxes, auto-totals, dropdowns, colour-coding, and even hyperlinks to guidance. Behind the scenes, the XBRL taxonomy offers a robust, software-agnostic structure for digital reporting. A free, open-source exemplar converter transforms your Excel file into a polished Inline XBRL report, ready for both human eyes and computer analysis.
All these resources are already freely accessible on EFRAG’s website, with an update expected once the European Commission formalises the VSME standard.
They’re the latest in EFRAG’s VSME Ecosystem initiative, designed to make sustainability reporting not just feasible but friendly for SMEs. Developed in response to user feedback from the VSME Exposure Draft consultation earlier this year, they offer a clearer path to voluntary reporting for SMEs.
There are some clever XBRL taxonomy-driven features built into the open source component that renders an Inline XBRL report, which means that the software can adapt to many taxonomy changes on its own. It very much remains to be seen how the market will adapt to the new VSME reporting arrangements. Will SME accounting software add these capabilities? Will companies turn to ESG specialist tools that will incorporate these open source components (or be inspired by them)? Will some SMEs use the templates directly? How and where will the data be made discoverable and analysed?
Notwithstanding these questions the initiative is to be very much commended. Hopefully it kickstarts a robust and competitive VSME reporting capability and indeed, proves to be food for thought for any number of relatively straightforward reporting requirements. We congratulate EFRAG on this effort and look forward to hearing feedback from the market.
From our point of view, it’s a smart move for digital reporting: practical, accessible, and proof that high-quality XBRL can – and should – work for everyone.
Dive into the tools here.
