Last week, in preparation for discussion at a public meeting of its Sustainability Reporting Technical Expert Group, EFRAG published an unapproved exposure draft of the European Sustainability Reporting Standards for Non-EU Groups (N-ESRS), which will establish sustainability reporting requirements for certain non-EU parent companies. EFRAG is expected to launch a formal public consultation on the draft standards in mid-July.
The draft N-ESRS apply to certain non-EU groups that generate significant EU revenue and have substantial EU operations through subsidiaries or branches. Unlike the ESRS, the N-ESRS is based on an impact-materiality approach rather than double materiality. The draft also includes a potential option, under specified conditions, to limit certain non-climate reporting to "EU-related" impacts. A redlined version of the exposure draft against the ESRS is here and EFRAG’s public presentation is here. EFRAG previously invited companies that may be in scope of the N-ESRS to participate in field testing of the draft standards to inform its technical work.
EFRAG currently expects to deliver technical advice to the European Commission in January 2027, with adoption of the final standards anticipated in mid-2027. The Society is reviewing the draft materials and evaluating opportunities for member-informed engagement in the forthcoming consultation process. Members interested in weighing in should contact Randi Val Morrison.
This post first appeared in the weekly Society Alert!