Sustainability Briefing — 29 August 2026

EFRAG has invited SMEs that produced a sustainability report using the Voluntary Standard for SMEs (VSME) for the 2024 or 2025 reporting years to share those reports, aiming to identify emerging practices and support other firms. The insights collected will contribute to the VSME Ecosystem 2026 initiative, with key findings to be published in Autumn 2026. The VSME is designed to help SMEs respond to the multiple, uncoordinated ESG data requests they receive from banks, investors and larger clients.

EFRAG has launched a call for expression of interest on applying an upcoming Voluntary Standard to companies outside the CSRD's mandatory scope. EFRAG is calling on companies and other stakeholders across the EU to take part in future engagement and research activities on the application of the upcoming Voluntary Standard by non-SME companies outside the scope of the CSRD; in particular, it will consider applications from EU companies that are not SMEs and have fewer than 1,000 employees or an annual turnover of less than €450m. Later this year, the European Commission is expected to issue the Voluntary Standard as a Delegated Act, available to companies outside the scope of the CSRD, based on the VSME issued by EFRAG in December 2024 and endorsed by the Commission in July 2025.

The European Commission has indicated it will act to make electrified heating more competitive with fossil fuels. The Commission said it would set an electrification target, propose action to lower the electricity-to-fossil-fuel price ratio, and measures to accelerate uptake of electrification solutions such as a market-based instrument on heat pumps. This matters for small firms and households heating premises: while 2.8 million heat pump units were installed in the EU in 2022, this slowed to 2.7 million in 2023 and 2.11 million in 2024. As of 2026, all EU countries can benefit from the Social Climate Fund, an €86.7 billion EU fund allowing countries to support energy-efficiency measures and the decarbonisation of heating and cooling, including heat pumps, for vulnerable households and micro-enterprises.

Ember's data shows a shift in the EU electricity mix that affects wholesale prices small businesses face. Wind and solar reached 30% of EU electricity in 2025, higher than fossil power at 29% for the first time on record, up from 20% five years prior. However, gas generation rose by 8% compared with 2024, largely due to reduced hydro output, pushing the EU power sector's gas import bill up to €32 billion — 16% higher than the previous year. Coal power fell to a new historic low of 9.2% of EU power in 2025, down from nearly a quarter ten years earlier.

A European Environment Agency briefing points to bio-based innovations, many derived from waste or by-products, as circular alternatives to fossil-based materials. Boosting the use of biological resources can help replace fossil fuel-based materials with more sustainable alternatives, contributing to a circular bioeconomy and addressing climate change; the briefing shortlists several innovations, many stemming from waste or by-products. The EEA stresses that sustainability safeguards are essential, with responsible sourcing, biodiversity protection, deforestation prevention and circularity vital to ensuring bio-based systems reduce environmental harm.

For freelancers and small teams building digital products, the Green Software Foundation's Carbon Aware SDK provides an open way to run workloads when and where electricity is cleaner. The SDK is a toolset to help measure a software's carbon emissions and choose when and where to run it, letting organisations leverage greener energy sources to reduce CO2. It is a WebApi and command-line tool that provides carbon-emissions data from multiple sources, such as WattTime and ElectricityMaps, to prioritise running during periods of green energy availability.