EU Sustainable Finance Platform Opposes Weaker Non-EU CSRD Rules

The EU Platform on Sustainable Finance, the European Commission’s expert advisory group, said on October 26, 2026 that non-EU companies under the Corporate Sustainability Reporting Directive should report impacts on one global basis, rejecting a “mixed approach” in EFRAG’s draft standard.

Eurosif, the European sustainable investment association, published a response the next day that also opposes the mixed approach. Both answered EFRAG’s consultation on ESRS-40a, the draft reporting standard for certain non-EU undertakings, which closed on October 31.

The dispute decides how much a US or UK parent will have to disclose from 2029, and what its EU subsidiaries will be asked to supply. The EU Platform on Sustainable Finance advises the Commission on sustainable finance policy, so its position carries weight when the Commission drafts the final standard.

What the EU Platform on Sustainable Finance told EFRAG

The EU Platform on Sustainable Finance makes three recommendations in its statement. The final standard should keep “a high degree of alignment with ESRS applicable to EU undertakings”, promote “appropriate EU Taxonomy-related information” and “maintain a consistent global reporting perimeter for sustainable impacts”.

It said the mixed approach “would weaken comparability, create an uneven playing field for transparency between EU and non-EU companies and reduce the usefulness and reliability of sustainability information”. It warned that the approach could add complexity and reporting cost. It also said the approach could obscure severe environmental and human rights impacts outside the EU and leave investors with data they cannot easily use.

Eurosif listed similar objections: incomplete and potentially misleading information, extra costs for investors who must fill the gaps, less consistent reporting and an uneven playing field between EU and non-EU companies.

Both bodies also object to the draft leaving out EU Taxonomy disclosures. They want non-EU companies allowed to report Taxonomy information voluntarily. Eurosif said the standard “should therefore enable non-EU companies to voluntarily report consolidated Taxonomy-alignment information”, and that “financial market participants rely on Taxonomy-alignment disclosures”.

Eurosif is the only investor body named in the statements reviewed. Neither document lists other signatories.

What the mixed approach in ESRS-40a would allow

EFRAG published the exposure draft in July 2026. It cuts reporting for non-EU companies to impacts alone, dropping the sustainability-related risks and opportunities that EU companies report under the European Sustainability Reporting Standards.

Under the mixed approach, a non-EU company would report climate on a global basis. For every other impact topic it could choose between global reporting and “EU-related impacts”, meaning the impacts of products or services sold in the EU or of the company’s activities in the EU.

EFRAG said the Commission explicitly asked for the mixed approach. The EFRAG Sustainability Reporting Board approved the draft for consultation but recorded reservations, which are set out in a Basis for Conclusions document published with it.

Board members raised four concerns. The approach may not give EU companies a level playing field with international peers. Using different scopes for different topics may impair understandability. It is uncertain whether EU-related impacts can be separated at all. And “relevant information may be lost, with a consequential risk of greenwashing”, particularly on human rights and on environmental impacts that cannot be confined to one geography.

The board’s reservations come as EFRAG’s sustainability board has also lost its chair, who stepped down after five months in the role.

Who falls under the non-EU CSRD rules

The thresholds were fixed in the Omnibus I simplification. A third-country undertaking not listed on an EU regulated market falls in scope if its net turnover in the EU exceeds €450 million in each of the last two consecutive financial years.

It must also have either an EU branch with net turnover above €200 million in the preceding financial year, or an EU subsidiary with net turnover above €200 million, held through an ultimate parent.

EFRAG’s presentation estimates about 1,200 companies fall in scope after the Omnibus, down from roughly 10,000 before it. No official list of those companies exists. First reports are due in 2029, on the 2028 financial year.

The turnover tests differ from the EU-company test, which covers entities with more than 1,000 employees and more than €450 million in net annual turnover.

Where the legislative process stands on CSRD

The legislative fight is over. Directive (EU) 2026/470, the Omnibus I amendments to the CSRD and the Corporate Sustainability Due Diligence Directive, was published in the Official Journal on February 26, 2026 and entered into force on March 18. Member states have until March 19, 2027 to transpose the CSRD changes.

No trilogue is pending on the non-EU standard. What remains is technical. EFRAG expects to send its advice on ESRS-40a to the Commission in January 2027, after weighing consultation responses. The Commission then decides whether to keep, amend or drop the mixed approach in the delegated act that sets the final standard.

The Commission asked for the mixed approach, so the statement from the EU Platform on Sustainable Finance is advice to the body that requested the feature. Delegated acts are open to scrutiny by the European Parliament and the Council, a stage where investor groups can renew their objections.

What it means for EU subsidiaries of US and UK groups

The mixed approach would have cut the scope of the data a non-EU group needs to collect, so its removal raises the work. If global reporting prevails, a US or UK parent would need impact data from operations well beyond its EU subsidiaries. Finance teams would have to build that collection process into the group close.

EU subsidiaries sit at the centre of the exercise. Their turnover decides whether the group is in scope, and their ledgers and local teams will be asked for much of the data. Groups near the €200 million subsidiary or €450 million EU turnover lines should test their position now against the 2027 and 2028 figures.

Firms advising these groups can use dedicated ESG advisers to map which entities and topics are affected. Groups that already consolidate ESG data outside spreadsheets will find a global perimeter easier to meet, and ESG reporting software can handle the added topics.

The Taxonomy question carries a cost for investors, not only for reporters. Asset managers need Taxonomy-alignment data to meet their own EU disclosure duties, and a voluntary route would let non-EU groups supply it where subsidiaries already report it.

EFRAG has published the ESRS-40a project page with the exposure draft and questionnaire. The Platform’s full statement and the Eurosif response are public.

The next date to watch is January 2027, when EFRAG is due to deliver its technical advice to the Commission. That advice will show whether the mixed approach survives the consultation.