how do I answer questions about management remuneration and ESG

Link remuneration policy to sustainability goals

Questions about executive remuneration policy appear in ESG questionnaires usually in two variants. The first is factual: is there an established remuneration policy, and who establishes it? The second goes further: is part of the variable remuneration linked to sustainability goals, such as CO2 reduction or diversity figures. For an SME without a supervisory board, often only the first question can be substantiated with a concrete document; the second requires a separate arrangement that not every company has.

If no formally established remuneration policy exists, "no" or "not applicable" is the honest answer — not an entry that suggests the link to sustainability goals exists informally. Keep as evidence the minutes of the meeting in which the remuneration policy was established, or the employment contract of the executive if the relevant provision is stated there. This question often appears in the same module as the question about who sits on the board and how it is composed — customers who ask about board composition often also ask about remuneration in practice, so it is worthwhile to prepare both answers at the same time.

Where this section appears in the VSME module

The EFRAG VSME basic module for non-listed SMEs covers board information, including remuneration policy, as part of broader governance indicators. The basic module is voluntary in nature: a company that does not fall within the scope of Directive (EU) 2022/2464 (CSRD) may still encounter this because a larger customer passes these questions down the chain. This explains why a supplier sometimes receives questions that substantively go further than what is mandatory for its own company — the question comes from the reporting framework of the customer, not from an obligation that rests on the supplier itself. Related governance questions, such as those on an internal reporting channel for whistleblowers, fall under the same module and follow the same logic: no arrangement means a factual "no", not an explanation that does not exist.