What does CSRD and Omnibus I mean for non-EU country undertakings with significant presence in the EU?<\/p>\n
In short:<\/p>\n
\u27a1\ufe0f A non\u2011EU group must report under CSRD if it<\/p>\n
\u27a1\ufe0f That EU entity must publish the parent\u2019s sustainability report in the EU<\/p>\n
\u27a1\ufe0f The non-EU reporting obligations apply for FY 2028 (report published in 2029)<\/p>\n
\u27a1\ufe0f This report is impact\u2011focused, not full double materiality.<\/p>\n
\u27a1\ufe0f A specific reporting standard (N-ESRS) will be adopted for non-EU groups by 30 June 2026.<\/p>\n
Read more in the article below \ud83d\udc47<\/p>\n
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Three categories of CSRD in-scope companies must publish a sustainability statement. Each category follows different rules and timelines.<\/p>\n
An EU company must publish a sustainability statement at individual level if it meets these two thresholds:<\/p>\n
This applies to large EU companies and credit institutions and insurance undertakings (same thresholds apply).<\/p>\n
An EU parent company must publish a consolidated sustainability statement if the group, at consolidated level, if it meets these two thresholds:<\/p>\n
Exception:\u00a0 Financial holding companies that do not intervene in the management of their subsidiaries and whose subsidiary undertakings\u2019 business models and operations are independent of one another, may opt out of consolidated sustainability reporting.<\/p>\n
A non\u2011EU parent company with significant presence in the EU must publish its parent sustainability statement in the EU (via its EU subsidiary or branch) if:<\/p>\n
They must publish a sustainability report at the global consolidated level of the non\u2011EU parent company.<\/p>\n
The report must follow one of these frameworks:<\/p>\n
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<\/strong>.<\/p>\n This non-EU special standard focuses on \u201cimpact\u2011related information\u201d only \u2014 not on financial risks or opportunities. This is a deliberate political and legal choice:<\/p>\n The report must be:<\/p>\n The EU subsidiary or branch is responsible for:<\/p>\n The report must undergo limited assurance.<\/p>\n The obligations for third\u2011country undertakings apply later than for EU companies, with reporting expected to begin 2029 for financial year 2028<\/strong>.<\/p>\n Article 19a(9) of the CSRD also sets out when an EU subsidiary can be exempt<\/strong> from preparing its own sustainability statement.<\/p>\n In short: a subsidiary doesn\u2019t need to report separately if it is fully covered by its parent company\u2019s consolidated sustainability report<\/strong>.<\/p>\n An EU subsidiary can rely on the parent company\u2019s reporting if:<\/p>\n To use the exemption, the subsidiary must include in its own management report:<\/p>\n If the parent is outside the EU:<\/p>\n Member States may require the parent\u2019s consolidated report to be published in a locally accepted language<\/strong>, with translation if needed.<\/p>\n 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:<\/p>\n In both cases, employee numbers of the joint venture are not added to the parent\u2019s employee count.<\/p>\n The directive only requires including employees of subsidiaries in consolidated thresholds.<\/p>\n Article 3(5)\u2013(7) specifies that groups calculate thresholds on a consolidated basis, which includes only parent + subsidiaries:<\/p>\n \u201cgroups 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 …\u201d<\/p>\n —<\/strong><\/p>\n Sources:<\/strong><\/p>\n [CSRD]<\/strong> Directive (EU) 2022\/2464: https:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/?uri=CELEX:32022L2464<\/a><\/p>\n [Accounting Directive ]<\/strong> Directive 2013\/34\/EU: https:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/?uri=CELEX%3A02013L0034-20240528<\/a><\/p>\n [Omnibus I]<\/strong> 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<\/a><\/p>\n\n
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5) Role of the EU subsidiary or branch<\/h3>\n
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6) Assurance requirements<\/h3>\n
7) Timeline<\/h3>\n
8) Purpose of the rules<\/h3>\n
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9) When Can an EU Subsidiary Be Exempt from Sustainability Reporting?<\/h3>\n
When the exemption applies<\/h5>\n
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Conditions the subsidiary must meet<\/h5>\n
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Additional rules for non\u2011EU parent companies<\/h5>\n
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Language requirements<\/h5>\n
10) Do Joint Ventures count in the employee CSRD thresholds?<\/h3>\n
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