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.

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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