CDP vs VSME: Which SME Sustainability Disclosure Should You Choose?
By Ricky Schoeman · Last verified: 31 October 2026
Quick answer: VSME is a voluntary reporting standard from EFRAG that produces a general-purpose sustainability report for SMEs, covering environmental, social and governance topics. CDP is an environmental disclosure platform where companies submit data that buyers and investors use to assess them. Neither is legally required. Which one you need usually depends on who is asking you for data.
The short version: a standard versus a platform
If a customer or bank has asked you for sustainability information, the first question to answer is which? “Disclosure” gets used loosely, and two different things sit behind it.
VSME is a reporting standard. You follow its structure, produce a report, and share that report with anyone who asks.
CDP is a disclosure platform with scoring. You submit responses through its portal, and requesters such as customers and investors can use that data.
That difference shapes almost everything else: who asks for each one, what they cover, what you get out of them, and how to choose.
What is VSME?
VSME is the Voluntary Sustainability Reporting Standard for non-listed SMEs, developed by EFRAG, the European Financial Reporting Advisory Group. It was designed as a proportionate alternative to the full European Sustainability Reporting Standards (ESRS) that apply to larger companies, and it is increasingly the format banks and larger customers across Europe ask smaller suppliers to use. What is VSME?
It has two modules:
- Basic Module (B1–B11): the minimum for small and medium-sized enterprises, and the objective for micro-enterprises. It covers basis for preparation, policies and practices, energy and greenhouse gas emissions, pollution, biodiversity, water, resource use, and workforce and governance topics, including convictions and fines for corruption and bribery.
- Comprehensive Module (C1–C9): an optional add-on that builds on the Basic Module, with additional datapoints that banks, larger customers and investors often request. It includes greenhouse gas reduction targets and climate transition plans (C3) and climate risks (C4).
On emissions specifically, the Basic Module’s B3 disclosure covers energy use and Scope 1 and Scope 2 emissions. Scope 3 is not a mandatory VSME disclosure; it appears as an optional supplement within the Comprehensive Module. VSME is voluntary and does not require assurance.
What is CDP’s SME questionnaire?
CDP (formerly the Carbon Disclosure Project) is a global environmental disclosure system. In 2023 it launched a dedicated questionnaire for SMEs, a streamlined route for smaller companies that don’t need the full corporate questionnaire.
Responses are submitted through the CDP portal and assessed against CDP’s own SME methodology. The focus is environmental: climate first, with Forests and Water Security modules added to the SME questionnaire in 2026 (unscored this year, according to published guidance from consultancies tracking the cycle).
Two points are worth being clear about:
- No law requires you to respond to CDP. The pressure comes from the customer, investor or lender asking you to.
- CDP’s scoring approach is its own. It is separate from VSME, and separate again from the full corporate methodology.
CDP vs VSME: side by side
| VSME | CDP SME questionnaire | |
|---|---|---|
| Type | Reporting standard | Disclosure platform with scoring |
| Issued by | EFRAG | CDP |
| Topics | Environmental, social and governance | Environmental (climate; forests and water added in 2026) |
| Structure | Basic (B1–B11) and Comprehensive (C1–C9) modules | SME questionnaire, assessed against indicators |
| Output | A report you control and can share with anyone | Responses submitted via CDP’s portal and assessed |
| Emissions | Energy and Scope 1 and 2 in the Basic Module; Scope 3 optional | Emissions and electricity data are among the assessed indicators |
| Targets and transition | Comprehensive Module (C3) | Assessed as indicators |
| Assurance | Not required | Verification may improve scoring |
| Legal status | Voluntary | Voluntary |
| Typically requested by | Banks, larger customers, investors | Customers and investors using CDP data |
Where they overlap, and where they don’t
The overlap is the data. Both ask about energy use and greenhouse gas emissions, and for both, the hard part is the same: building a reliable emissions inventory. If you’ve done that work, you’ve done the biggest piece of either route. Measuring it (typically following the GHG Protocol) is carbon accounting; VSME and CDP are two places to report the output. Scope 1, 2, and 3 emissions explained
The differences matter just as much.
- Breadth. VSME covers social and governance topics such as workforce, anti-corruption and policies. CDP’s SME questionnaire is environmental.
- Scoring. CDP assesses responses against a methodology. VSME produces a report with no score attached.
- Control. A VSME report is yours: you decide who receives it. CDP responses are part of CDP’s system.
CDP says its SME questionnaire is closely aligned with European frameworks including VSME. That’s CDP’s characterisation, and it’s useful as a sign that overlapping data can be reused. But alignment isn’t equivalence. Completing one does not mean you’ve completed the other.
How to choose: a practical framework
Start with who’s asking.
- A bank, lender or customer asks for a VSME report → Use VSME. This is increasingly the standard request in European supply chains and financing conversations.
- A customer asks you to respond through CDP, for example as part of its supplier engagement programme → Respond to CDP. It’s their requested route.
- You’ve received both requests, or something ambiguous → Build your emissions inventory first. It’s required for either, so the work isn’t wasted whichever you choose.
- You want a single document to send to any stakeholder → VSME gives you that.
- You want an independent score customers can point to → CDP provides one.
Don’t assume you need both. Many SMEs will only ever be asked for one. Start with whatever your requesters are actually asking for, and expand later if demand grows.
What CDP’s 2026 SME data tells us
In October 2026, CDP published From Preparation to Progress, an analysis of almost 11,000 SMEs that disclosed through its SME questionnaire in 2025. Its headline finding was that more than 95% of those SMEs made progress against at least one key environmental indicator, and nearly 40% met most or all of the basic indicators.
The more telling numbers sit beneath the headline. Only 20% had an emissions reduction target and 32% had reduction initiatives in place. And while 63% have a transition plan or expect one within two years, only 15% have one today. Europe performs well in CDP’s analysis, with Finland, France and Spain named among the leaders.
Two caveats matter. First, this is a self-selected group: these are companies that chose to disclose, so the results don’t describe SMEs in general. Second, the analysis doesn’t show that disclosing caused the progress. What it does suggest is that disclosure builds foundations (governance, risk management, a data baseline) more readily than it produces reduction commitments. CDP itself frames the next step as moving from preparation to action.
That gap is also a useful lens for choosing between routes: whichever you pick, the inventory comes first, and targets and transition plans come after.
What it costs and what it takes
For both routes, most of the effort goes into the emissions inventory, not the form itself. If you already collect utility bills, fuel records and basic activity data, you’re partway there.
- VSME: the standard is free to use. Your costs are time, data collection and any tooling you choose.
- CDP: the same inventory underlies your response, and CDP may also charge fees depending on your situation. (Editor note: confirm the current 2026 fee structure and exemptions on CDP’s FAQ page before publishing.)
Where software fits
Software can reduce the manual work of collecting data, calculating emissions and generating a report. But tools differ in what they produce. A platform that generates a VSME-format report doesn’t automatically support CDP submission, and the reverse is also true. Before committing, ask any vendor which outputs it supports and check the answer yourself. Our comparison covers how tools stack up on VSME reporting. Compare the best VSME reporting software for 2026
Frequently asked questions
Is CDP the same as VSME?
No. VSME is a reporting standard issued by EFRAG that produces a report you can share with anyone. CDP is a disclosure platform with its own questionnaire and scoring. CDP says its SME questionnaire is aligned with European frameworks including VSME, but completing one does not satisfy the other.
Do SMEs have to report to CDP?
No. No law requires a company to respond to CDP. Responses are usually driven by requests from customers, investors or lenders.
Can I use VSME data for a CDP response?
Much of the underlying data overlaps, particularly energy use and Scope 1 and 2 emissions, so a solid inventory serves both. You’ll still need to complete CDP’s questionnaire in its own format.
Which is better for a small company, CDP or VSME?
Neither is better in general. VSME is a broader report you control and can share with any stakeholder; CDP gives you an independent, scored assessment. Choose according to who is asking.
Does VSME include Scope 3 emissions?
Not as a mandatory disclosure. The Basic Module covers energy and Scope 1 and 2. Scope 3 appears as an optional supplement in the Comprehensive Module.
Do I need both CDP and VSME?
Not necessarily. Many SMEs will be asked for only one. Start with the route your customers or lenders request, and expand if more requests arrive.
