EFRAG has resumed development of the Non-EU European Sustainability Reporting Standard (N-ESRS) and launched field testing ahead of a public consultation expected in July 2026. The standard will establish dedicated CSRD sustainability reporting requirements for non-EU groups with significant activities in the European Union while seeking alignment with ISSB standards. The initiative aims to improve global sustainability reporting interoperability, reduce duplication, and provide a practical reporting framework for multinational companies.
EFRAG has officially resumed work on the European Sustainability Reporting Standard for Non-EU Groups (N-ESRS), a key component of the EU’s Corporate Sustainability Reporting Directive (CSRD) framework. The initiative will establish dedicated sustainability reporting requirements for non-EU parent companies with significant business activities in the European Union, ensuring greater transparency and comparability of sustainability information across global markets.
The announcement marks an important step in the implementation of the CSRD’s third-country reporting regime. While recent EU Omnibus reforms have focused on simplifying sustainability reporting obligations for many European companies, the development of a dedicated reporting standard for non-EU groups remains a core element of the EU’s long-term sustainability reporting architecture.
To support the development process, EFRAG has launched a field testing programme and call for participation, inviting multinational companies, preparers, auditors, and other stakeholders to assess the practicality and operability of the draft standard. The field tests will evaluate how companies can apply the proposed reporting requirements in practice and help identify areas where further simplification or clarification may be needed.
A major focus of the testing process will be interoperability with global sustainability reporting frameworks, particularly the International Sustainability Standards Board (ISSB) standards. EFRAG is also assessing how EU-specific sustainability disclosure requirements can be adapted for multinational groups headquartered outside the EU while maintaining consistency with the broader CSRD reporting objectives.
The draft N-ESRS is expected to introduce a mixed reporting approach, allowing non-EU groups to leverage existing sustainability reporting systems while meeting EU regulatory requirements. This approach seeks to reduce duplication, minimise compliance costs, and facilitate reporting across multiple jurisdictions.
EFRAG plans to launch a formal public consultation on the draft N-ESRS in July 2026. The consultation period is expected to run for approximately 100 days and will provide companies, investors, regulators, auditors, and civil society organisations with an opportunity to provide feedback on the proposed sustainability reporting framework.
For multinational groups headquartered outside the European Union, the development of the N-ESRS represents a significant regulatory development. Companies with substantial EU turnover, subsidiaries, or branches should closely monitor the consultation process and assess the potential impact on existing ESG reporting systems, governance structures, data collection processes, and sustainability disclosure practices.
The standard is expected to play a central role in shaping how non-EU companies report sustainability information to European stakeholders, investors, and regulators. As the EU continues to expand and refine its sustainability reporting framework, alignment between the N-ESRS, simplified ESRS, and ISSB standards will be critical to reducing reporting complexity while maintaining transparency and accountability.
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