The European Financial Reporting Advisory Group (EFRAG) has opened a 100-day public consultation on the ESRS‑40a Exposure Draft, a proposed European Sustainability Reporting Standard for certain non‑EU undertakings.
The draft has been developed as technical advice to the European Commission (EC) under Article 40a of the Accounting Directive.
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EFRAG invited stakeholders in and outside the EU to comment on the proposals by 31 October. Feedback will be used to further develop and finalise EFRAG’s technical advice, which is expected to be delivered to the EC in January 2027.
The Commission is then expected to launch its own consultation before adopting the standard via a delegated act.
The ESRS-40a draft is intended to support the implementation of the Corporate Sustainability Reporting Directive by establishing sustainability reporting requirements for certain third‑country undertakings with significant activities in the EU.
The requirements will be applicable to undertakings that meet the thresholds set out in Article 40a.
In a statement, EFRAG said the objective of ESRS‑40a reporting is to “ensure that there is a level playing field” for undertakings operating in the EU market.
It is also expected to ensure transparency on impacts on people as well as the environment of non-EU undertakings with relevant EU activities, the statement added.
ESRS‑40a was previously referred to in EFRAG’s preliminary documents as the Non‑EU ESRS (N‑ESRS) or ESRS for third countries (ESRS‑TC).
EFRAG plans to release a cost-benefit analysis in mid‑August 2026. It also encouraged stakeholders to provide views on the expected costs and benefits of the proposed requirements.
EFRAG SRB chair Kerstin Lopatta said: “Article 40a of the Accounting Directive gives EFRAG a clear and focused mandate: to develop a standard that captures how large non-EU companies impact people and the environment.
“Getting this right requires input from those who will use and apply the standard, which is why this public consultation is open to all stakeholders worldwide. At stake are both a level playing field and genuine transparency in the EU Single Market.”
The first sustainability reports prepared under the future ESRS‑40a are expected to cover financial year 2028, with publication in 2029.
