CSRD & SMEs 2026: Do SMEs Still Need to Report on Sustainability?
- Anna Neumann
- Apr 5
- 3 min read
Updated: Apr 6
With the latest EU “Omnibus I” proposals, many small and medium-sized enterprises (SMEs) are asking the same question: Are we still required to report under CSRD?
The short answer: Most SMEs are no longer directly in scope—but they are far from unaffected.
Are SMEs Still Subject to CSRD?
A major shift in the regulatory landscape is that listed SMEs are expected to be removed from the mandatory CSRD scope—provided they remain below the new thresholds of more than €450 million net turnover and more than 1,000 employees.
This significantly reduces the number of companies with direct reporting obligations in the EU—by an estimated 80–85%.
However, this does not mean SMEs can ignore sustainability reporting altogether.
New Voluntary Standards for SMEs
Approximately four months after the Omnibus I regulation enters into force, the EU is expected to introduce voluntary sustainability reporting standards for SMEs.
These will likely build on the current VSME (Voluntary SME Standard)—but with important adjustments.
Why updates are needed:
The current VSME framework was originally designed for very small companies, below the earlier CSRD thresholds
It does not yet reflect the needs of mid-sized companies that are now out of scope but still economically relevant
What to expect:
Better alignment with larger SMEs and mid-sized companies
Simplified and proportionate requirements
A practical bridge toward CSRD/ESRS alignment—without full complexity
Want to prepare early without overinvesting? A focused materiality assessment helps SMEs identify the most relevant ESG topics, including impacts, risks, and opportunities (IROs). The Caribou Materiality Assessment Module provides a structured and efficient starting point—fully aligned with future standards.
Indirect Pressure: The Value Chain Effect
Even without direct obligations, many SMEs will face increasing indirect pressure through their role in the value chain.
Large CSRD-reporting companies will continue to request ESG data from suppliers. However, the Omnibus proposals introduce important safeguards:
Companies with fewer than 1,000 employees are considered “protected”
Data requests must be limited and standardized
Requests must not exceed the scope of future VSME standards
If they do, SMEs have the right to decline providing the information
This is a crucial step to prevent disproportionate administrative burden.
What Information Can SMEs Withhold?
SMEs are explicitly allowed to protect sensitive information, including:
Data that could harm their business position
Trade secrets and confidential information
Any data protected under other legal provisions from unauthorized disclosure
This ensures that transparency does not come at the cost of competitiveness.
What Should SMEs Do Now?
Even without mandatory CSRD obligations, SMEs should take a focused and strategic approach:
Conduct a double materiality assessment to identify key ESG topics, including impacts, risks, and opportunities
Define clear strategic sustainability priorities, supported by internal processes and governance
Prepare for value chain data requests from larger customers
Gradually align with emerging voluntary standards (VSME)
Build lean, targeted reporting processes instead of overly complex systems
The key is simple: focus on relevance, not volume.
👉 Start smart: The Caribou Materiality Assessment Module helps SMEs quickly identify what truly matters, respond efficiently to stakeholder requests, and stay aligned with upcoming EU requirements—without unnecessary complexity.
Bottom Line
SMEs may be stepping out of mandatory CSRD—but they are entering a new era of indirect accountability.
Those who act early—by focusing on what truly matters—will not only stay prepared, but also strengthen their competitive position within the value chain.
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