why do I as a small business have to answer sustainability questions for a large customer

Your customer is passing the CSRD obligation on to you

Your customer is usually asking this because they themselves fall under the CSRD, Directive (EU) 2022/2464, and are obliged to report on their entire value chain — including suppliers like you. As a small business, you yourself remain outside the direct reporting obligation, but that information still needs to come from somewhere. Your customer often uses a questionnaire derived from the EFRAG VSME, the voluntary standard specifically created for non-listed SMEs to keep the questions manageable.

The questions themselves usually cover three clusters: basic company data, energy and emission figures, and policies on working conditions and governance. For the first cluster — what the registered name of the company is and in which countries the enterprise has establishments — you usually already have a source in the value chain file. For emission figures, that is more difficult: if you do not maintain CO₂ accounting, the most honest answer is that you do not have that data now, rather than an estimate that you cannot substantiate.

VSME module and CSRD chain obligation

The basis lies in two documents that connect with each other. Directive (EU) 2022/2464 requires large, listed companies to report on their chain, and that obligation extends to suppliers as soon as the customer requests substantiation. The EFRAG VSME is not a legal requirement but a format: it was designed to prevent each major customer from sending its own list with slightly different questions to SMEs. This also explains why questionnaires from different customers are often very similar in structure, even though they come through different portals.