EFRAG has published a draft standard for large non‑European companies

EFRAG has published the final missing piece of the CSRD — a draft standard for large non‑European companies (ESRS‑40a). What the standard brings:

Reporting starts in 2029 for the financial year 2028. It concerns non‑European companies with turnover in the EU above €450 million and with a European subsidiary/branch above €200 million.

After the Omnibus, this means a decrease in the number of affected companies by roughly 88 % — from about 10 000 to approximately 1 200.

Compared to the European ESRS, it is narrower: it focuses exclusively on the company's impacts on people and the environment, and excludes risks, opportunities, resilience, and dependencies.

Non‑European companies could, for non‑climate impacts, choose whether to report globally or only EU‑related impacts — even topic by topic. For example, microplastics worldwide, air pollution only for the EU.

Thus the proposal does not create equal conditions between European and foreign companies. Varying scope across different topics reduces clarity. It is debatable how to separate “EU‑related impacts” at all.

The approval required an explicit statement that the mixed approach in the proposal is at the explicit request of the European Commission, not from EFRAG’s own initiative. It is a textbook example of the tension between simplification and substance.

The consultation runs until 31 October 2026 and is open to everyone — including those outside the EU. The final standard is to be completed in January 2027.