Monthly Archives: March 2026

EFRAG 2026 Sustainability Reporting Work Programme in short

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The CSRD requires the European Commission (EC) to consult the Member States and the European Parliament on EFRAG’s work program.

A document setting out the proposed EFRAG Sustainability Reporting work programme for 2026 was approved by the EFRAG SRB on 26 March 2026.

🔑 Key takeaways

EFRAG’s 2026 work programme outlines the Sustainability Reporting Pillar’s priorities, shaped by CSRD mandates, the Omnibus I Directive, and the renewed EC pilot project running until mid‑2027.

Activities depend on the adoption of Delegated Acts for the Voluntary Standard (VS) and simplified ESRS, expected in June 2026. A stable draft of the Delegated Act on simplified ESRS is currently anticipated in April 2026.

🔹 Core Priorities for 2026

📝 Standard‑setting:

Development of N‑ESRS for non‑EU groups under CSRD Article 40a, including a public consultation (mid‑July to mid‑October 2026) and delivery of technical advice by end of January 2027 (tentative).

🖥️ Digitalisation:

Digitalisation is recognised as a key enabler for the effective application of ESRS and VS.

An ESRS XBRL taxonomy will be developed following the ESRS simplification to support machine-readability, as well as further enhancement of the ESRS Knowledge Hub with interactive and multilingual features (subject to funding), as well as publication of the XLS list of ESRS requirements.

🫂 SME Ecosystem:

Continuation of support for SMEs through the SME Forum. Research on emerging practices from VSME reports will inform future guidance.

Technical enhancements to the XBRL taxonomy and the Digital Template are expected to continue, supporting usability, interoperability and digital readiness.

🎓 Education:

Creation of training materials, videos, and structured learning modules, integrated into the Knowledge Hub.

💁 Implementation Support:

Focus on designing future support mechanisms. An Agenda Consultation (July–October 2026) will gather stakeholder input on priorities for ESRS and VS implementation guidance.

Work on Anticipated Financial Effects is planned jointly with ISSB.

EFRAG also envisages updating the State of Play report already issued in 2025, in order to assess emerging ESRS reporting practices. A similar report will also be issued for reports prepared in compliance with VSME.

⛓️ Interoperability:

Ongoing alignment with ISSB/SASB, GRI and GHG Protocol, including consultation responses, updated mappings, and digital interoperability efforts.

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The program has been developed considering regulatory timelines and resource allocation. It also takes account of the need to wait until the Commission has adopted the Delegated Acts for the VS and for Simplified ESRS (expected in June 2026) before launching any new public consultations.

Deliverables for the second half of 2026 are indicative and subject to regulatory and market developments.

Source: https://www.efrag.org/system/files/sites/webpublishing/Meeting%20Documents/2602131320521776/03-01%20EFRAG%20Work%20programme%202026_SRB_25032026.pdf

The world’s biggest individual investor is effectively redefining financial materiality

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The below document published recently by world’s biggest individual investor, NBIM, is a must read for any board member and top manager — as nature is moving up the investor agenda.

NBIM stresses that these expectations are based on their “beliefs about what contributes to long-term value creation and sound risk management”.

Norges Bank Investment Management (NBIM) — holding 2.3% of all listed European companies — is effectively redefining financial materiality

The document sets out how NBIM expects companies to manage environmental and social matters, including nature related impacts, dependencies, risks, and opportunities.

It is not soft guidance, NBIM writes. “It is a de facto global standard for nature‑related governance.”

It includes board‑level oversight requirements, policies, time‑bound targets and action plans, as well as engagement and potential divestment for non‑compliance.

“The degradation of land, freshwater systems, and marine environments all affect the long-term value of companies in our portfolio. The financial risks … are already apparent and are likely to increase over time.

Companies face risks when natural resources they depend on become scarce or degraded, and when their environmental impacts lead to regulatory action, legal liability, operational restrictions or reputational risks.

Evolving trends in consumer demands and availability of natural resources will also present opportunities as new markets are created.

We expect companies to address these topics in a manner meaningful to their business model and wish to support them in their efforts.

Our expectations are primarily directed at company boards.

Boards should understand the broader environmental and social consequences of company operations, taking into account the interests of relevant stakeholders.

They must set their own priorities and account for the associated outcomes.

Companies should pursue relevant opportunities and address significant risks.

They should report financially material information to investors, and broader impacts as appropriate.

Boards should effectively guide and review company management in these efforts.

Our expectations follow a logical implementation flow from strategic oversight to implementation.

The core expectations establish the foundational governance and strategic requirements that boards and senior management should address.”

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An unparalleled reach across markets and sectors

NBIM manages Norway’s sovereign wealth fund, set up in the 1990s to invest revenues from the country’s oil and gas industry.

The fund, the largest of its kind in the world, currently has a value of just over $2 trillion.

It invests in more than 7,200 companies across 60 countries and has stakes in around 1.5% of the world’s publicly listed stocks with holdings including a 1.3% stake in Nvidia, a 1.2% stake in Apple and a 1.3% stake in Microsoft.

This gives NBIM unparalleled reach across markets and sectors.

Where to start to meet investor expectations?

By adopting the ESRS 2.0 reporting standards and associated governance processes.

If you have not yet participated in our ESRS 2.0 training, offered free of charge, you are welcome to get in touch: https://cleeritesg.com/index.php/how-can-we-help/

 

Sources :

https://www.nbim.no/en/responsible-investment/our-expectations/climate-and-nature/nature/

https://www.nbim.no/contentassets/5fce0e1e7e15449ca986ac1cd26d7e0f/nature-expectations-2026.pdf

CSRD and non-EU country companies after Omnibus I

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What does CSRD and Omnibus I mean for non-EU country undertakings with significant presence in the EU?

In short:

➡️ A non‑EU group must report under CSRD if it

  • generates more than €450 million in net turnover within the EU (for each of the two consecutive financial years) AND has,
  • EITHER an EU subsidiary generating more than €200 million in net turnover (or large undertaking),
  • OR an EU branch generating more than €200 million in net turnover

➡️ That EU entity must publish the parent’s sustainability report in the EU

➡️ The non-EU reporting obligations apply for FY 2028 (report published in 2029)

➡️ This report is impact‑focused, not full double materiality.

➡️ A specific reporting standard (N-ESRS) will be adopted for non-EU groups by 30 June 2026.

Read more in the article below 👇

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Three categories of CSRD in-scope companies must publish a sustainability statement. Each category follows different rules and timelines.

1) EU undertakings (individual reporting) — Article 19a

An EU company must publish a sustainability statement at individual level if it meets these two thresholds:

  • Net turnover > €450 million (for each of the two consecutive financial years), and
  • More than 1,000 employees (average during the financial year)

This applies to large EU companies and credit institutions and insurance undertakings (same thresholds apply).

2) EU parent companies (consolidated reporting) — Article 29a

An EU parent company must publish a consolidated sustainability statement if the group, at consolidated level, if it meets these two thresholds:

  • Net turnover > €450 million (for each of the two consecutive financial years), and
  • More than 1,000 employees (average during the financial year)

Exception:  Financial holding companies that do not intervene in the management of their subsidiaries and whose subsidiary undertakings’ business models and operations are independent of one another, may opt out of consolidated sustainability reporting.

3) Non‑EU (third‑country) undertakings — Article 40a

A non‑EU parent company with significant presence in the EU must publish its parent sustainability statement in the EU (via its EU subsidiary or branch) if:

  • The non‑EU group generates more than €450 million turnover in the EU AND it has
  • either an EU subsidiary with more than €200 million turnover or classified as large,
  • or an EU branch with more €200 million turnover

4) What must third‑country undertakings report?

They must publish a sustainability report at the global consolidated level of the non‑EU parent company.

The report must follow one of these frameworks:

  1. ESRS, or
  2. Standards deemed “equivalent” by the European Commission, or
  3. Specific reporting standards (N-ESRS) that the Commission will adopt through delegated acts for non‑EU groups by 30 June 2026.

Specifically, N-ESRS will specify the information that an undertaking shall disclose about its material impacts in relation to environmental, social, and governance sustainability topics.

This non-EU special standard focuses on “impact‑related information” only — not on financial risks or opportunities. This is a deliberate political and legal choice:

  • The CSRD legally limits their reporting scope.
  • The EU cannot impose full double materiality on non‑EU parents.
  • Impact reporting fills the gap left by ISSB/IFRS-S.
  • It avoids excessive burden and jurisdictional conflict.
  • It ensures minimum transparency for EU markets.

The report must be:

  • Published in the EU,
  • Digitally tagged,
  • Freely accessible,
  • Prepared in a single electronic reporting format.

5) Role of the EU subsidiary or branch

The EU subsidiary or branch is responsible for:

  • Publishing the parent company’s sustainability report in the EU,
  • Ensuring it is accessible to the public.

6) Assurance requirements

The report must undergo limited assurance.

7) Timeline

The obligations for third‑country undertakings apply later than for EU companies, with reporting expected to begin 2029 for financial year 2028.

8) Purpose of the rules

  • Ensure level playing field between EU and non‑EU companies.
  • Provide investors with comparable sustainability data.
  • Prevent regulatory arbitrage by large non‑EU groups operating in the EU.

9) When Can an EU Subsidiary Be Exempt from Sustainability Reporting?

Article 19a(9) of the CSRD also sets out when an EU subsidiary can be exempt from preparing its own sustainability statement.

In short: a subsidiary doesn’t need to report separately if it is fully covered by its parent company’s consolidated sustainability report.

When the exemption applies

An EU subsidiary can rely on the parent company’s reporting if:

  • The parent (EU or non‑EU) publishes a consolidated sustainability report that includes the subsidiary.
  • That consolidated report follows EU sustainability reporting standards (ESRS) or is deemed equivalent to them.
Conditions the subsidiary must meet

To use the exemption, the subsidiary must include in its own management report:

  • The name and registered office of the parent company.
  • Weblinks to the parent’s consolidated sustainability report and its assurance opinion.
  • A clear statement that the subsidiary is exempt from preparing its own sustainability report.
Additional rules for non‑EU parent companies

If the parent is outside the EU:

  • Its consolidated sustainability report and assurance opinion must be published in line with EU rules.
  • The subsidiary must still disclose the EU Taxonomy Article 8 indicators for its own EU activities, either in its own management report or within the parent’s consolidated report.
  • Why this matters: Article 8 of the EU Taxonomy requires companies to disclose KPIs such as: Taxonomy‑eligible and aligned turnover, CapEx and OpEx. These KPIs must still be visible for the EU‑based activities, even if the parent handles the rest of the sustainability reporting.
  • In other words: Even when a non‑EU parent covers the group’s sustainability reporting, the EU subsidiary cannot “disappear” from the EU Taxonomy. Its EU activities must remain transparent and compliant.
Language requirements

Member States may require the parent’s consolidated report to be published in a locally accepted language, with translation if needed.

10) Do Joint Ventures count in the employee CSRD thresholds?

Under Directive 2013/34/EU, a joint venture is not treated as a subsidiary (full control) but as an undertaking under joint control, typically accounted for using:

  • the equity method in consolidated accounts, or
  • cost or equity method in individual accounts.

In both cases, employee numbers of the joint venture are not added to the parent’s employee count.

The directive only requires including employees of subsidiaries in consolidated thresholds.

Article 3(5)–(7) specifies that groups calculate thresholds on a consolidated basis, which includes only parent + subsidiaries:

“groups shall be groups consisting of parent and subsidiary undertakings to be included in a consolidation and which, on a consolidated basis, exceed the limits of …”

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Sources:

[CSRD] Directive (EU) 2022/2464: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32022L2464

[Accounting Directive ] Directive 2013/34/EU: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02013L0034-20240528

[Omnibus I] Directive (EU) 2026/470 of the European Parliament and of the Council of 24 February 2026 amending Directives 2006/43/EC, 2013/34/EU, (EU) 2022/2464 and (EU) 2024/1760 as regards certain corporate sustainability reporting requirements and certain corporate sustainability due diligence requirements: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L_202600470

More about EFRAG’s draft N-ESRS project: https://www.efrag.org/en/projects/noneu-groups-standard-setting/research-phase

Summary of opinions on draft simplified ESRS: ECB, EBA, ESMA, EIOPA

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🔎 What the financial and supervisory authorities expect from the revised ESRS

When the European Commission adopts the delegated acts on the ESRS, it must consider EFRAG’s draft (December 2025) and request the opinions of a wide range of EU bodies — including ESMA, EBA, EIOPA, the ECB, the European Environment Agency, the EU Agency for Fundamental Rights (FRA), the Committee of European Auditing Oversight Bodies and the Platform on Sustainable Finance.

Below is a short overview of the ECB, EBA, ESMA and EIOPA opinions — all of which shed light on the sustainability information that financial markets need, and the expectations placed on companies, banks and insurers.

You can download a more comprehensive summary here: Summary of ECB, EBA, ESMA and EIOPA opinions on simplified ESRS 05-03-2026

🔹 Digitisation and usability

ESMA emphasises that effective digital tagging is essential for the usability of sustainability information. Users must be able to identify and retrieve key data efficiently.

🔹 Concerns about cumulative reliefs

All authorities highlight that the accumulation of relief measures risks undermining the CSRD’s objective: creating a reliable, standardised data ecosystem that enables benchmarking, risk differentiation and comparability.

🔹 Permanent reliefs and distorted incentives

They warn that several permanent reliefs could create incentives for undertakings to omit relevant information or delay efforts to improve methodologies and data access. This would weaken the integrity and comparability of disclosures — and increase greenwashing risks.

🔹 Competitiveness and alignment with ISSB

In many areas, the new ESRS reliefs go beyond those in the IFRS ISSB standards, with potential negative consequences for EU companies’ competitiveness and access to global financial markets.

🔹 Reliefs must remain exceptional

The ECB recognises that companies may need initial flexibility while building data systems and estimation methods. But it stresses that reliefs must remain exceptional, not become the norm.

🔹 Progressive capability‑building

For the EBA, once impacts, risks and opportunities (IROs) are identified, undertakings should progressively equip themselves to provide the required ESRS information.

🔹 Avoiding long‑term data gaps

All authorities agree: it is essential to avoid indefinite data gaps and to maintain incentives for companies to start collecting data and improving coverage and quality.

🔹 Assurance implications

ESMA notes that permanent reliefs will require additional judgement from assurance providers and more documentation from preparers — potentially increasing the reporting burden.

👥 FRA’s perspective

In addition, the EU Agency for Fundamental Rights (FRA) issued an opinion focused on safeguards for people adversely affected by corporate activities. FRA warns that several changes may make severe or systemic human rights impacts less visible — especially those occurring deep in value chains or affecting marginalised groups.

FRA’s full opinion is particularly relevant for HR, sustainability and compliance professionals: https://fra.europa.eu/en/news/2026/fra-issues-legal-opinion-proposed-simplified-european-sustainability-reporting-standards

Link to the Omnibus I directive: Directive – EU – 2026/470 – EN – EUR-Lex