Learning Center / Getting Started / 08
Getting Started
Who regulates sustainability
Business sustainability in Europe is regulated at several levels. You don't need to know them all, but it helps to understand who decides what.
European Commission — Defines the directives (such as the CSRD) and recommendations (such as the adoption of the VSME and ESRS) that set the rules for companies in the EU.
EFRAG (European Financial Reporting Advisory Group) — The technical body that develops reporting standards. EFRAG created both the ESRS (for large companies) and the VSME (for SMEs). It functions as the "technical author" of the standards.
Member States — Transpose European directives into national legislation. In Portugal, the CSRD transposition process is underway, with a delay expected under the Omnibus proposal.
Financial regulators and the ECB — Banks are increasingly pressured to assess ESG risk of their clients, which explains why they ask SMEs for sustainability data.
In practice, what this means for you: Nobody will fine a non-listed SME for not having a sustainability report. But those who ask you for ESG data (banks, clients, partners) are responding to these regulatory pressures. The VSME exists to make that response easier.
Getting Started