EFRAG consults on sustainability reporting standards for non-EU groups

EFRAG’s proposed ESRS-40a standards would shape sustainability reporting for qualifying non-EU parent groups. 

The European Financial Reporting Advisory Group (EFRAG) has published for public consultation draft ESRS-40a, the proposed sustainability reporting standards for certain non-EU parent groups that are subject to Article 40a of the Corporate Sustainability Reporting Directive (CSRD).

This publication provides an overview of the proposed ESRS-40a and certain reporting considerations relevant to non-EU parent groups that may be subject to Article 40a of the CSRD beginning in FY 2028.

The proposal would establish a dedicated sustainability reporting framework for qualifying non-EU groups with significant activity in the European Union (EU). While largely based on the revised European Sustainability Reporting Standards (ESRS) adopted by the European Commission on 3 July 2026, ESRS-40a would introduce several important modifications, including an impact-only materiality approach, a potential option to limit certain disclosures to EU-related impacts, and enhanced interoperability provisions intended to reduce duplicative reporting for groups already reporting under other sustainability frameworks.

 EFRAG's consultation focuses on several significant aspects of the proposal, including the removal of disclosures related to risks and opportunities, the proposed "mixed approach" to reporting EU-related impacts, interoperability with ISSB-based reporting and the use of concepts derived from EU laws and regulations in a global reporting context.

 The consultation period remains open until 31 October 2026. Following consideration of stakeholder feedback and field testing, EFRAG is expected to provide technical advice to the European Commission in 2027, after which the Commission will determine the final requirements.

Refer to our technical line for further information on the scope of the CSRD and how non-EU entities may be affected more broadly:

How the EU’s Corporate Sustainability Reporting Directive affects non-EU-based multinationals (Via EY.com US)

European Commission adopts revised ESRS for sustainability reporting