ESRS for Certain Non-EU Undertakings in Accordance with Article 40a of the Accounting Directive
Please note that as of June 2026, the ESRS for Non-EU Groups project is now referred to as the ESRS for Certain Non-EU Undertakings in Accordance with Article 40a of the Accounting Directive project (ESRS-40a ED).
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.
On 23 July 2026, EFRAG issued the public consultation.
Public Consultation
Consultation period: 23 July – 31 October 2026 (100 days).
Participate in the consultation by:
- Reviewing the Exposure Draft and supporting documents
Completing the online questionnaire and providing technical comments and recommendations
📄 ESRS-40a Exposure Draft
➡️ Submit your feedback via the online questionnaire
Supporting documents
- Markup version of the Exposure Draft (ESRS-40a) (compared with the Revised ESRS of 3 July 2026)
- Basis for Conclusions
- Log of Amendments
- The List of datapoints included in ESRS-40a will be published in due course.
EFRAG SRB position on the mixed approach
Prior to the launch of the public consultation on the ESRS-40a Exposure Draft, EFRAG SRB Chair Kerstin Lopatta shared a letter with the European Commission outlining the Board's position on the proposed "mixed approach". While the EFRAG SRB approved the Exposure Draft for public consultation, it also expressed reservations regarding this approach and clarified that it reflects a request from the European Commission. The letter provides additional context on the Board's considerations and is published in the interest of transparency.
Stay informed
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.
Interested in the development of ESRS-40a? Check out the consultation page.
Questions ? Get in touch: esrs-40a@efrag.org