Please note that as of June 2026, the ESRS for Non-EU Group project is now referred to as ESRS for Third-Country Undertakings.

Per Article 40(a) of the Accounting Directive, certain third-country undertakings with significant activities in the EU need to report on their sustainability impacts. The Corporate Sustainability Reporting Directive (CSRD) foresees the adoption of separate standards for this purpose, withthe first sustainability statements required to be published in 2029, based on financial year 2028.

In line with this mandate, EFRAG completed the technical development of the N-ESRS Exposure Draft in 2024 and early 2025, based on the original scope, turnover criteria, and strategic and technical considerations. However, in light of potential changes to the CSRD arising from the Omnibus negotiations, work on the N-ESRS was temporary paused during the ESRS simplification process.

Now that simplified draft ESRS has been delivered to the European Commission as technical advice, EFRAG is resuming work on the N-ESRS. This includes revisiting both technical and strategic considerations.

As a result of developments in the Omnibus negotiations, the turnover threshold and scope under Article 40(a) of the Accounting Directive have changed. Third-country undertakings not listed on EU regulated markets that generate net turnover in the Union exceeding EUR 450 million in each of the last two consecutive financial years, and that have either EU branches with net turnover exceeding EUR 200 million in the preceding financial year or are the ultimate parent of EU subsidiaries with net turnover exceeding EUR 200 million in the preceding financial year, will have to report.

The next steps include finalising the N-ESRS Exposure Draft and the related consultation package, as well as awaiting for the green light from the European Commission to launch the public consultation. The consultation is expected to commence after the simplified ESRS are adopted as a Delegated Act, which is expected in mid-July 2026.

Recently, EFRAG issued the Field Test Call for Expression of Interest (extended from 1 July till 8 July) and opened the registration for the webinars on 22 July.

For questions as to whether a sustainability report in accordance with article 40(a) of the Accounting Directive has to be produced or for other questions related to the CSRD / Accounting Directive, please refer to the European Commission’s FAQ’s on the topic.