European Financial Reporting Advisory Group launches 100-day consultation on ESRS-40a draft for certain non-EU undertakings

The European Financial Reporting Advisory Group has published the ESRS-40a Exposure Draft and opened a public consultation on the proposed sustainability reporting standard for certain non-EU undertakings. The draft is being developed as technical advice to the European Commission under Article 40a of the Accounting Directive and is intended to support implementation of the Corporate Sustainability Reporting Directive for third-country groups with significant activities in the European Union that meet the relevant reporting thresholds. The proposed standard is designed to create a level playing field for undertakings operating in the EU market and to provide transparency on the impacts of in-scope non-EU undertakings on people and the environment. EFRAG is seeking feedback on the draft requirements, including practical implementation challenges and the relevance of the disclosures. Supporting materials include a markup against the revised ESRS issued on 3 July 2026, a basis for conclusions and a log of amendments. EFRAG also said a list of datapoints will be published later and a cost-benefit analysis will follow in mid-August 2026. After the consultation closes, EFRAG will analyse feedback and use it to finalise its technical advice, which is expected to be delivered to the European Commission in January 2027. The Commission is then expected to run its own public consultation before adopting a delegated act. The first reports under the future ESRS-40a are expected to cover financial year 2028, with publication in 2029.