Sustainability Reporting Standards: GRI, ESRS and VSME

Sustainability Reporting Standards: GRI, ESRS and VSME

In a context where sustainability is increasingly integrated into business strategies and European regulatory requirements, ESG (Environmental, Social, Governance) reporting today represents a fundamental tool for measuring, communicating, and improving overall performance.
Companies are called upon to respond to growing demands for transparency from customers, investors and institutions, and to do so they can adopt reporting standards recognized at both EU and international level.
In Europe, the three main references for sustainability reporting are:

  • GRI (Global Reporting Initiative), the most widely used voluntary standard worldwide;
  • ESRS (European Sustainability Reporting Standards), the EU standard required for companies subject to the CSRD (Corporate Sustainability Reporting Directive);
  • VSME (Voluntary Sustainability Reporting Standard for SMEs), the EU standard designed for SMEs that wish to start simplified reporting processes.

GRI – Global Reporting Initiative

The Global Reporting Initiative (GRI) represents the international reference standard for sustainability reporting. Created in the late 1990s with the aim of promoting transparency regarding the impacts organizations generate on the environment and society, the GRI was the first framework to propose a structured and comparable model of sustainability reporting.
Before the introduction of the CSRD Directive, the vast majority of companies — including those subject to the previous Non-Financial Reporting Directive (NFRD) — referred precisely to the GRI standards for drafting their sustainability reports.

Structure of the GRI standard

The latest revision of the GRI, published in 2021, introduced a modular and more flexible framework designed to adapt to different organizational contexts and ongoing regulatory changes.
The standards are structured into three main levels:

  • Universal Standards (GRI 1,2 and 3)
    Define the reporting principles, general information about the organization (profile, governance, policies, stakeholders) and the methodology for identifying material topics, namely the most significant impacts.
  • Topic Standards (series 200 – Economic, 300 – Environmental, 400 – Social)
    Dive deeper into impacts related to each ESG area: from economic performance to natural resource management, up to workers’ rights and community relations.
  • Sector Standards
    Provide sector-specific guidance for high-impact industries such as coal, energy, agriculture, or mining. Additional sector standards are currently under development.

Although voluntary in nature, the GRI is today the most widely adopted standard in the world.

Its strength lies in its completeness and flexibility: it allows for the coverage of a wide range of themes, fostering data comparability and reporting credibility.
The GRI is also used as a methodological foundation for developing new standards, including the European ESRS themselves, further confirming its high international recognition.

ESRS – European Sustainability Reporting Standards

The European Sustainability Reporting Standards (ESRS) represent a paradigm shift for sustainability reporting in Europe.

Introduced by the European Union through the CSRD Directive (2022), the ESRS make ESG reporting mandatory for thousands of European companies, with the aim of ensuring transparency, comparability and reliability of sustainability data.
Developed through technical work carried out by EFRAG (European Financial Reporting Advisory Group) and officially adopted by the European Commission on 31 July 2023, the ESRS mark the beginning of a new integrated approach, where sustainability becomes fully embedded in the management and communication of business performance, aligned with financial information.

Structure of the ESRS

The current set of standards approved by the Commission consists of 12 ESRS, organized into two blocks:

  • 2 Cross-cutting standards (ESRS 1 and ESRS 2)
    They provide general principles, definitions and transversal requirements applicable to all companies.
    ESRS 1 defines the reporting logic, while ESRS 2 identifies mandatory common information (policies, actions, targets, metrics and governance).
  • 10 Topical standards, aligned with the three ESG dimensions:
    • Environmental (E1–E5): Climate change, pollution, water and marine resources, biodiversity and ecosystems, resource use and circular economy.
    • Social (S1–S4): Own workforce, workers in the value chain, affected communities, and consumers.
    • Governance (G1): Business conduct.

This architecture enables a systematic and granular representation of impacts, risks and opportunities (IROs) that companies must identify and communicate according to the double materiality principle, one of the distinguishing elements of the CSRD.
The goal is to create a common European data base capable of engaging with investors and global financial markets, facilitating the transition towards a sustainable and competitive economy.
Beyond meeting regulatory requirements, the ESRS provide companies with a powerful management tool. Unlike GRI, they make it even more urgent for companies to develop sustainability strategies and practices, encouraging greater integration into business processes.

Within this context, it is necessary to highlight that the so-called Omnibus Package, published in February 2025 by the European Commission and currently under discussion at EU level, envisages a substantial revision of the ESRS standards, aiming to simplify their structure and make reporting more proportionate to company size and complexity.
The revision proposal presented by EFRAG, not yet final, foresees a reduction of complete reporting sets — both mandatory and voluntary — of 68%.

VSME – Voluntary Standard for SMEs

The VSME (Voluntary Sustainability Reporting Standard for non-listed SMEs) was created to meet a concrete need: enabling SMEs to start sustainability reporting processes in a gradual, proportionate and accessible way.
Developed by EFRAG in alignment with the European ESRS standards, the VSME was published in its final version in 2024.
Through a simplified approach to reporting, the VSME allows SMEs to respond to stakeholder requests, access financing and calls for proposals requiring documented environmental and social criteria, and improve internal management of sustainability-related data and processes.
It represents a bridge between voluntary reporting and EU regulatory requirements: a particularly suitable tool for SMEs that, while not obligated to report, need to begin collecting and communicating their ESG information.

Structure of the VSME

The standard is designed with a gradual approach and is divided into two modules: a mandatory Base Module , and an optional Comprehensive Module for SMEs wishing to provide additional information.

  • Base Module: includes 11 disclosure requirements divided into 4 areas:
    • General information: B1 and B2 (“Basis for preparation” and “Practices, policies and future initiatives for transitioning towards a more sustainable economy”).
    • Environmental: B3, B4, B5, B6, B7 (“Energy and greenhouse gas emissions”, “Pollution of air, water and soil”, “Biodiversity”, “Water”, “Resource use, circular economy and waste management”).
    • Social: B8, B9, B10 (“Workforce – General characteristics”,”Workforce – Health and safety, force” – “Remuneration, collective bargaining and training”).
    • Governance: B11 (“Convictions and fines for corruption and bribery”).
  • Comprehensive Module: includes 9 additional disclosure requirements for SMEs that wish to provide a more detailed ESG picture.
    • General information: C1 and C2 (“Strategy: Business Model and Sustainability – Related Initiatives” and “Description of practices, policies and future initiatives for transitioning towards a more sustainable economy”).
    • Environmental: C3 and C4 (“GHG reduction targets and climate transition” and “Climate risks”).
    • Social: C5 and C6 (“Additional (general) workforce characteristics” and “Additional own workforce information – Human rights policies and processes”).
    • Governance: C7 (“Severe negative human rights incidents”).

Conclusions

Thei GRI, ESRS and VSME standards are essential tools to guide companies in measuring and communicating their sustainability impacts. GRI offers a consolidated global language; the ESRS (in their current version, pending the revision under the Omnibus Package) ensure completeness and compliance within the European context; and the VSME provides SMEs with a tailored, simplified pathway toward ESG transparency.
Companies wishing to undertake a reporting journey have at their disposal a solid and diverse set of standards to reference: those looking to strengthen stakeholder trust, improve data management and position themselves competitively in a market increasingly oriented toward sustainability and ESG performance can confidently choose the reporting solution that best fits their needs.