BETTER FINANCE supports efforts to reduce disproportionate reporting burdens and recognises the importance of ensuring that sustainability reporting frameworks remain proportionate and operationally feasible. Simplification can contribute to the competitiveness of European businesses and reduce unnecessary administrative costs.
However, following the Omnibus changes, the original Voluntary Sustainability Reporting Standard for SMEs (VSME) - initially developed as a voluntary framework for smaller companies with fewer than 250 employees - has effectively become the reference point for a significantly broader population of companies with up to 1,000 employees. This substantially expands the importance and practical implications of the VSME beyond its original design and purpose.
BETTER FINANCE is concerned that additional changes introduced by the European Commission, particularly regarding the operation of the value-chain cap, may unintentionally reduce the completeness, consistency and comparability of sustainability information available throughout reporting chains. While reducing reporting burdens remains important, simplification should not create information gaps that ultimately reduce decision-useful information for investors and end users.
BETTER FINANCE therefore considers that, at minimum, datapoints classified as both "necessary" and "necessary if applicable" should remain within the value-chain cap, while datapoints categorised as "voluntary" may be excluded.
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