The VSME (Voluntary Sustainability Reporting Standard for non–listed SMEs (www.vsme.gr) has been positioned by the Omnibus proposal, as the proposed simplified structured alternative, for companies no longer under the CSRD, reducing complexityandhelping companies focus only on material topics, without the heavy burden of full CSRD compliance.
However, regardless of the chosen reporting framework (under CSRD or VSME), companies should necessarily adhere to sustainability reporting, as, apart from any regulatory shifts, market expectations remain high!
In particular:
a. Investors still demand ESG transparency
As ESG integration signals long-term stability and lower financial risk, investors are prioritizing sustainability-linked investments. Companies with strong ESG performance tend to attract more capital, enjoy better loan terms and achieve higher valuations. Morgan Stanley’s 2024 Sustainable Signals Report (https://www.morganstanley.com/content/dam/msdotcom/en/assets/pdfs/Morgan_Stanley_Institute_for_Sustainable_Investing_Sustainable_Reality_2024.pdf) shows that nearly 80% of global investors consider environmental reporting a key factor in decision- making. Furthermore, according to a recent Stanford-MSCI Sustainability Institute survey (https://www.msci-institute.com), governance issues -such as absence of ESG organized, structured data- remain a top priority matter, with 76% of institutional investors stating that governance quality significantly impacts investment performance.
So, the process of ESG monitoring and reporting enhances maturity and governance readiness, two crucial qualities investors still look for, even when disclosure isn’t mandatory.
b. ESG risks are still business risks
Whether it’s exposure to climate events, supply chain disruptions or reputational fallout, ESG issues are tied directly to business performance and resilience. According to the Global Risks Report 2024 of World Economic Forum(https://www.weforum.org/publications/global-risks-report-2024) extreme weather, biodiversity loss, ecosystem collapse and critical change to earth systems are ranked among the top global risks, likely to present a material crisis on a global scale. In addition, according to Mc Kinsey – Global Supply Chain Leader Survey 2024 (www.mckinsey.com) 90% of respondents experienced supply chain challenges within the previous year. Extreme weather events delay shipments, damage infrastructure, and disrupt production cycles. Droughts are limiting agricultural output, hurricanes are closing major ports and rising temperatures are straining energy resources. These disruptions, constitute major business risks, forcing enterprises to rethink sourcing strategies and contingency planning to minimise risk exposure.
Thus, even if reporting obligations shift, ESG risks still remain…top business risks, that necessarily need to be addressed. Voluntary reporting, reflects the management of ESG data by a company and its alertness towards sustainability challenges.
c. Supply chain buyers still require sustainability data
Large buyers are under increasing pressure to disclose the ESG performance of their entire value chain. Therefore, they’re asking suppliers, many of whom fall outside CSRD scope, for ESG data -anyway- and regardless of regulatory obligations. This “trickle-down effect” means that many, mid-market companies must still provide sustainability disclosures to maintain business relationships. Companies that can’t provide this information, risk being replaced by competitors who can. According to the 2024 Global Trade Report by Thomson Reuters Institute (www.thomsonreuters.com), 34% of companies collecting supplier ESG data, cited requirements from significant customers as a primary reason. These customers often enforce ESG disclosures just to stay compliant and sustainable in their own supply chains
So, voluntary ESG reporting assists mid – market companies providing crucial information to their customers and remain within their value chain.
d. Competitors that keep reporting will gain a competitive edge
i. Cost savings through ESG efficiency remain crucial
Companies that insist on ESG voluntary reporting and select, monitor and assess valuable data that can lead to effective business practices, have considerable cost savings, gaining a considerable competitive edge. According to a recent research of May 2025 of National Bank of Greece among 600 SMEs (https://www.nbg.gr/en/group/studies-and-economic-analysis/reports/smes-esg-2025), one third of businesses with ΕSG strategies, already recognise tangible operational benefits, while the remaining two- thirds report satisfaction (without having yet quantified the positive impact). The research also reveals a concrete, measurable, positive effect on profitability identified by the businesses themselves.
Thus, companies that integrate sustainability practices in their strategy, present considerable cost efficiency and enhanced profitability, gaining significant competitive advantage.
ii. Attracting and Retaining Top Talent is still critical
Recent studies have illuminated a shift in workforce values, particularly among millennials and Gen Z professionals, who are now a significant portion of the labour market. These groups are not only just looking for a pay check but for purpose-driven workplaces. According to Deloitte Insights in their 2023 Global Millennial and Gen Z Survey (https://www.deloitte.com/global/en/issues/work/genz-millennial-survey.html) 40% of millennials and Gen Z workers prefer to work for companies that have strong sustainability credentials. Furthermore, recent study by Harvard Business Review (www.hbr.org), notes that companies with strong sustainability programs have a 25% higher likelihood of attracting top talent, while ESG initiatives play a crucial role in enhancing employee engagement and loyalty and retaining the employees already settled in their roles. A report by McKinsey & Company (https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/esg-momentum-seven-reported-traits-that-set-organizations-apart) revealed that robust ΕSG commitments are directly linked to higher job satisfaction among employees. Employees at companies with strong ESG principles feel more connected to the company’s mission and are more likely to stay long term. This sense of belonging and purpose is a critical factor in reducing turnover rates and fostering a culture of loyalty and productivity.
Thus, Companies that integrate ESG into their corporate culture can attract, engage and retain top talent, gaining a significant competitive edge in recruitment.
Conclusion
Despite any legal requirements, companies should necessarily disclose their ESG data – even – on a voluntary basis, for mainly business reasons : to maintain transparency, build stakeholder trust, remain in the value chain of their customers, acquire sustainability- oriented top talent and finally gain competitive advantage.
By disclosing ESG data through reporting, a company informs its stakeholders, regarding its management of sustainability risks and opportunities, which -apart from any moral imperative or regulatory obligation- are… ultimately major business issues, that necessarily need to be addressed!
Concluding, companies adhering to voluntary reporting, signal governance maturity and commitment to long term business resilience -naturally– inspiring the trust and loyalty of their stakeholders!
By Maria El. Stefanaki,
Attorney at Law (LLM Cambridge)
ESG Officer
