VSME Module C: Comprehensive Disclosures
VSME Module C extends the basic Module B disclosures with a more comprehensive set of sustainability metrics — covering Scope 3 emissions, water, biodiversity, diversity and pay equity, value chain due diligence, and sustainability targets. It is designed for SMEs that want to demonstrate ESG leadership or that face more demanding customer requirements.
VSME Module C extends the basic Module B disclosures with a more comprehensive set of sustainability metrics — covering Scope 3 emissions, water, biodiversity, diversity and pay equity, value chain due diligence, and sustainability targets. Module C builds on Module B with six additional disclosure areas:.
Module C content — what is added beyond Module B
Module C builds on Module B with six additional disclosure areas:
Scope 3 GHG emissions: Total Scope 3 emissions for material categories — at minimum, Category 1 (purchased goods and services) and Category 11 (use of sold products) where material. Calculation methods: spend-based EEIO factors for Category 1; product use-phase emission factors for Category 11. Most SMEs will use spend-based estimates for initial Module C Scope 3 disclosure.
Water: Total water withdrawal in m³ by source (municipal, surface, groundwater); water consumption (if different from withdrawal); and whether any operations are in water-stressed areas.
Biodiversity: Whether the SME has operations in or adjacent to protected areas (Natura 2000, UNESCO sites); any significant biodiversity impacts identified; and steps taken to avoid or mitigate impacts.
Diversity and equal opportunity: Headcount breakdown by gender and age group (under 30, 30–50, over 50) by employee category; the gender pay gap (average remuneration of male vs female employees as a percentage).
Value chain due diligence: A description of how the SME identifies and addresses human rights and environmental risks in its own supply chain — particularly relevant for SMEs that are themselves buyers of goods from other SMEs in high-risk geographies.
Sustainability targets: Any targets the SME has set for sustainability performance — GHG reduction targets, energy efficiency targets, waste reduction targets, diversity targets. Not mandatory to have targets — but if they exist, Module C requires disclosure.
Scope 3 for SMEs — keeping it proportionate
Scope 3 calculation is the most technically demanding element of Module C. The VSME takes a proportionate approach — SMEs are not expected to conduct the same level of Scope 3 analysis as large CSRD companies.
For Module C Scope 3, the spend-based approach is the appropriate starting point: multiply your procurement spend by sector in each commodity category by an EEIO emission factor (kg CO2e per € of spend). This gives a rough estimate (±50–100% accuracy) but is sufficient for Module C purposes and satisfies most customer ESG questionnaire Scope 3 data requests.
Practical Scope 3 calculation for SMEs: Download your supplier spend data from your accounting system, categorised by commodity type (manufacturing inputs, IT equipment, logistics, professional services etc.). Apply sector-specific EEIO factors from ESGMaster's Scope 3 Calculator — which covers all 15 categories with DEFRA 2025 factors. The calculation takes 2–4 hours for a company with 10–20 commodity categories.
Category 11 (use of sold products): Only material if your products consume energy or contain GHGs during customer use. A software SME has no Category 11; a pump manufacturer whose products consume significant electricity over their lifetime has material Category 11. Assess materiality before calculating — most SMEs can exclude Category 11 with a brief rationale.
For future years: as your largest suppliers begin VSME or CSRD reporting, their Scope 1 and 2 data becomes available to improve your Category 1 calculation from spend-based to supplier-specific methodology.
Module C and ESG-engaged investors
Module C is particularly relevant for SMEs seeking investment — whether from private equity, impact investors, green bond issuers, or banks offering preferential ESG-linked financing.
Private equity ESG due diligence: PE funds with ESG commitments (Article 8 or 9 under SFDR) conduct ESG due diligence on acquisition targets. A target company with VSME Module C disclosure provides the investor with a structured, comprehensive starting point — reducing due diligence time and demonstrating management sophistication.
Green and sustainability-linked loans: Banks offering sustainability-linked loans (SLLs) with preferential rates for ESG performance require baseline metrics and annual tracking. VSME Module C provides exactly the metrics needed for SLL KPI frameworks — GHG intensity, energy efficiency, waste reduction, and diversity metrics are all standard SLL KPIs.
Impact investing: Impact investors require evidence of positive environmental or social outcomes. VSME Module C's comprehensive metric set — covering GHG, water, biodiversity, and social metrics — provides the data foundation for impact reporting.
EU green finance: The EU Green Bond Standard and EU Taxonomy KPIs require underlying company ESG data. For SMEs accessing EU green finance instruments, VSME Module C data provides the ESG evidence base that lenders and investors require.
Frequently asked questions
Must we complete Module B before Module C?
Yes — Module C is an extension of Module B, not a standalone disclosure. All Module B data points are required plus the additional Module C metrics. Start with Module B, ensure data is collected and accurate, then add Module C data in the same reporting cycle.
How do we calculate the gender pay gap for Module C?
The Module C gender pay gap is the unadjusted gap — average male remuneration divided by average female remuneration, expressed as a percentage. Extract total annual remuneration (salary + bonus) by gender from payroll, divide by headcount by gender to get averages, then calculate the ratio. If women's average remuneration is 92% of men's, the gender pay gap is 8%.
Do we need to disclose our sustainability targets if we have not set any?
If you have no formal sustainability targets, simply state this in your Module C disclosure — it is not a compliance failure. However, Module C disclosure of the absence of targets may prompt questions from ESG-engaged customers and investors. Consider setting at least a modest energy reduction or GHG reduction target — even a 10% reduction over 3 years demonstrates commitment.