EFRAG has launched a 100-day public consultation on the Exposure Draft of the European Sustainability Reporting Standards for certain non-EU undertakings, designated as ESRS-40a ED. The draft framework has been developed as technical advice to the European Commission under Article 40a of the Accounting Directive, and all interested global stakeholders are invited to submit their feedback prior to the deadline on 31 October.
The proposed draft standard applies directly to non-EU third-country entities with significant commercial activities inside the European Union that meet the reporting thresholds defined under Article 40a, supporting the broader implementation of the Corporate Sustainability Reporting Directive (CSRD). EFRAG is encouraging target businesses to share detailed perspectives on practical implementation challenges alongside the overall relevance of the mandated disclosures, which were previously identified in preliminary documents as Non-EU ESRS (N-ESRS) or ESRS for third countries (ESRS-TC).
The overarching objective of the ESRS-40a reporting framework is to establish a level playing field for market operators within the EU whilst ensuring complete transparency concerning how non-EU operations affect people and the environment. Stakeholders wishing to participate can review the Exposure Draft alongside a markup version comparing it with the revised ESRS of 3 July 2026, the Basis for Conclusions, and the Log of Amendments, before completing the online consultation questionnaire. EFRAG has also provided webinar recordings introducing the proposals, with a detailed list of datapoints and a Cost-Benefit Analysis scheduled for release in mid-August 2026.
Following the consultation closure, EFRAG will process all responses to finalise its Technical Advice for submission to the European Commission in January 2027. The European Commission will then launch a subsequent public consultation ahead of adopting the delegated act, with initial sustainability reports under ESRS-40a expected to cover the 2028 financial year for publication in 2029.
Kerstin Lopatta, EFRAG Sustainability Reporting Board Chair, noted that Article 40a gives EFRAG a focused mandate to capture the environmental and social impacts of large non-EU businesses. She emphasised that worldwide input is essential to secure both market fairness and transparency before reporting becomes mandatory. Chiara Del Prete, EFRAG Sustainability Reporting Technical Expert Group Chair, added that the draft represents the final piece of the CSRD framework, bringing accountability to global corporate groups whilst acknowledging implementation challenges for non-climate topics that remain unregulated in many foreign jurisdictions.
