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Principles for the preparation of the sustainability report (Basic and Comprehensive Module)

🗂️ VSME Principles for the preparation of the sustainability report (Basic and Comprehensive Module) , page 6

Complying with this Standard

  1. This Standard sets requirements that allow the undertaking to provide relevant information on:

(a) how it has had and is likely to have a positive or negative impact on people or on the environment in the short-, medium- or long-term; and

(b) how environmental and social issues have affected or are likely to affect its financial position, performance and cash flows in the short-, medium- or long-term.

  1. The undertaking shall report information that is relevant, faithful, comparable, understandable and verifiable.

  2. Depending on the type of activities carried out by the undertaking, the inclusion of additional information (metrics and/or narrative disclosures) not covered in this Standard is appropriate in order to disclose sustainability issues that are common in the undertaking’s sector (i.e. typically encountered by businesses or entities operating within a specific industry or field) or that are specific to the undertaking, as this supports the preparation of relevant, faithful, comparable, understandable and verifiable information. This includes the consideration of information on Scope 3 GHG emissions (see paragraphs 50 to 53 of this Standard). Appendix B provides a list of possible sustainability issues.

  3. The undertaking may complement the metrics from the Basic and Comprehensive modules with additional qualitative and/or quantitative information where appropriate in accordance with paragraph 10 above.

Comparative information

  1. The undertaking shall report comparative information in respect of the previous year except for metrics disclosed for the first time. The undertaking shall report comparative information from the second year of reporting.

If applicable principle

  1. Certain disclosures only apply to specific circumstances[2] . In particular, the instructions provided in each disclosure specify such circumstances and the information that is to be reported only if considered ‘applicable’ by the undertaking. When one of these disclosures is omitted, it is assumed to not be applicable.

Inclusion of subsidiaries in the reported data

  1. If the undertaking is a parent company of a group, it is recommended that it prepares its sustainability report on a consolidated basis, including information from its subsidiaries.

  2. If the parent undertaking has prepared its sustainability report on a consolidated basis, including information from its subsidiaries, the subsidiary undertakings are exempted from reporting.

Timing and location of the sustainability report

  1. If a sustainability report is prepared to meet the needs of large undertakings or banks that require an update annually, it shall be prepared annually. If the undertaking prepares financial statements, the sustainability report shall be prepared with a period of time that is consistent with the preparation of the financial statement. If specific datapoints did not change from the previous reporting year, the undertaking may indicate that no changes occurred and refer to the information provided for that specific datapoint in the previous year’s report.

  2. The primary function of this report is to inform actual or potential business counterparties. The undertaking may decide to make its sustainability report available to the public. In this case, the undertaking may present its sustainability report in a separate section of the management report if it has one. Otherwise, the undertaking may present its sustainability report as a separate document.

  3. To avoid publishing the same information twice, the undertaking may refer in its sustainability report to disclosures published in other documents that can be accessed at the same time as the sustainability report[3] .

Classified and sensitive information

  1. When the provision of the disclosures in this Standard require disclosing classified or sensitive information, the undertaking may omit such information. If the undertaking decides to omit such information, it shall state that this is the case under disclosure B1 (see paragraph 24).

Coherence and linkages with disclosures in financial statements

  1. If the undertaking also prepares financial statements, the information provided in its sustainability report following this Standard shall:

(a) be coherent with what is reported in the financial statements for the same period; and

(b) be presented in a way that facilitates the understanding of the linkages that exist with the information reported in financial statements, for example by using appropriate crossreferences.

[2] For example, the legal requirement to disclose specific information, or already voluntarily disclosing specific information through an Environmental Management System.

[3] In a future online tool version of the VSME Standard, when appropriate, the undertaking may refer to disclosures published in other documents rather than the sustainability report using incorporation by reference. Such reference is made by including the page number of the relevant source, provided that the PDF format of the source document is also made available in the online tool version.