The European Financial Reporting Advisory Group (EFRAG) estimates that the number of non-EU companies subject to the Corporate Sustainability Reporting Directive (CSRD) will decrease significantly from approximately 10,000 to around 1,200 following the European Commission's Omnibus simplification reforms.
EFRAG has also resumed the development of the Non-EU European Sustainability Reporting Standards (N-ESRS), with a draft standard expected to be released for public consultation in mid-July. Work on the standard had been paused due to anticipated changes arising from the Omnibus package, which aims to reduce sustainability reporting obligations and administrative burdens for businesses.
Under the original CSRD framework, non-EU companies were required to report if they generated more than €150 million in revenue and had an EU subsidiary or branch generating at least €40 million in revenue. The revised Omnibus proposal substantially increases these thresholds, limiting the scope to companies with more than €450 million in EU revenue for two consecutive years and an EU subsidiary or branch generating over €200 million in revenue.
According to EFRAG, these changes are expected to reduce the number of non-EU companies within the CSRD scope by approximately 88%. The remaining companies are expected to include 350–450 U.S. companies, 150–200 UK companies, and 100–150 companies each from Switzerland and Japan.
EFRAG also indicated that the upcoming N-ESRS will focus primarily on sustainability-related impacts for non-EU companies, unlike the ESRS applicable to EU companies, which requires disclosures on impacts, risks, and opportunities. The standard will cover key sustainability topics, including climate change, pollution, water resources, governance, strategy, policies, actions, metrics, and targets.
The consultation period for the draft standard is expected to last 100 days, with EFRAG planning to submit its final technical advice to the European Commission in January 2027.
