CSRD and CSDDD
On 26 February 2026 the EU published the final legal text in the Official Journal of the revised Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD or CS3D) known as Omnibus I. The key changes are summarized in the European Council’s press release. Transposition started in late March 2026. Member States have 12 months to implement the CSRD amendments, while changes to the CSDDD must be applied by 26 July 2028.
On 24 July 2026 the EC’s public consultation on the development of guidelines to support the implementation of the CSDDD closed. According to Corporate Disclosures submissions reveal starkly divergent views on scope, liability and what counts as meaningful due diligence. In their submission SMEunited urge the EC to address the trickle-down effect on SMEs. The US is highly critical. Despite signing a trade framework agreement with the EU over a year ago, the US government is threatening action against the EU on the basis the Omnibus I changes to CSRD and CSDDD do not go far enough. But as Andreas Rasche argues in this LinkedIn post the EU is within its rights to regulate non-EU companies with significant business on EU markets and that there is no reason why US companies should be treated any differently to other non-EU nations (see below on ESRS-40a).
Frank Bold Guidance
To help businesses implement the legislation see Frank Bold’s Business Knowledge and Implementation Centre. The centre includes this legal briefing on the new restrictions on information requests to business suppliers following the Omnibus 1 revisions to the CSRD and CSDDD and explains the practical implications for companies. On 1 September 2026 Frank Bold published an up-to-date version of their overview of EU sustainability law, focusing solely on the legislation that was affected by recent changes. On 8 September 2026 Frank Bold, with the Coalition for Corporate Justice and Anti-Slavery International, launched a new guide to help Member States turn the CSDDD into strong national law. And on 15 September 2026 Frank Bold published an updated version of their joint legal analysis of the environmental provisions of the CSDDD, alongside Client Earth: this guide supports Member States on how to transpose the Directive in a way that preserves its ambition and practical effect and clarifies details of environmental due diligence for the companies preparing for implementation.
Revised ESRS and Voluntary Sustainability Reporting Standard (VS)
On 21 September 2026, following a two-month scrutiny period by the European Parliament and the Council of the European Union during which neither institution objected, the EC published the delegated acts (DA) on the revised ESRS and Voluntary Sustainability Reporting Standard (VS) in the Official Journal of the EU. This version is legally binding and will officially enter into force on 10 November 2026.
The revised ESRS simplify and streamline sustainability reporting requirements and will apply to financial years beginning on or after 1 January 2027, with early adoption for financial year 2026 permitted. EFRAG has hosted all the related documents here. Meantime the VS will support companies outside mandatory CSRD reporting and establishes a ’value chain cap’, preventing CSRD in-scope companies from requiring more information from value-chain partners with 1,000 employees or fewer than what the voluntary standard covers. The VS is very similar to the VSME which it supersedes.
In this LinkedIn post Andreas Rasche clarifies what this means for companies within scope of the CSRD. For FY 2026 companies have three options: use the ‘old’ ESRS (including the "quick fixes"); use the "old" ESRS and utilise some of the "reliefs" of the revised ESRS; and use the revised ESRS. For FY 2027 companies must use the revised ESRS. The VS meantime has already entered into force.
Some, like Frank Bold, believe the VS is ill-suited to companies employing up to 1,000 since the VSME on which it is based was developed for much smaller companies. Accordingly, they recommend that large companies outside the scope of the revised CSRD report using the revised ESRS rather than the VS.
ESRS Datapoints
EFRAG has released the updated list of datapoints under the ESRS, following the finalisation of the revised ESRS. This updated version uses the same methodology as the datapoint list published in Implementation Guidance 3 (IG 3) and replaces the previous version. EFRAG invites stakeholders to flag any fatal flaws in this list by 23 October 2026. The final version will be published by the end of 2026.
Draft XBRL Taxonomy for ESRS
On 17 September 2026 EFRAG released the Draft XBRL Taxonomy for the Revised ESRS and launched a public consultation, open until 11 November 2026. The consultation asks whether the draft Taxonomy accurately reflects the Revised ESRS and provides an effective basis for the digital reporting of sustainability disclosures. Stakeholders can share their feedback and help inform EFRAG’s work to finalise the Taxonomy ahead of its planned submission to European Securities Markets Authority (ESMA) and the EC by the end of 2026.
Guidance on ESRS
Late last year EFRAG launched the ESRS Knowledge Hub to help users navigate the ESRS, including the VSME, and implementation materials developed by EFRAG - register here. The 2026 Revised ESRS text and Voluntary Standard (VS) are now available on the EFRAG ESRS Knowledge Hub as explained here. The new interactive document set includes all revised topical ESRS standards and the VS and enable comparisons with and between previous versions. Most recently, on 28 August 2026, EFRAG published the 2026 Draft List of Datapoints for Revised ESRS and an online survey here.
There’s a growing amount of guidance from other sources. Read a full analysis of the publication of the revised ESRS and VS by Frank Bold here. In late August 2026 Position Green hosted a webinar on the final ESRS: watch the recording here and access the slides here. Euronext has also launched the Sustainability Reporting Guide 2026.
Guidance on VS
EFRAG has developed a considerable amount of materials supporting implementation of its VSME and duly housed it in the SME Ecosystem of its Knowledge Hub as this educational video explains. As the VS supersedes the VSME the VSME material is expected to be tweaked to support the VS. The EC plans to launch a dedicated portal that will include new templates and guidance suited to larger entities that are eligible to use the VS. EFRAG and the EC are hosting a hybrid outreach event on 9 October 2026 to explore the latest developments and what they mean in practice: register here.
European Sustainability Reporting Standards for Certain non-EU Undertakings (ESRS-40a)
The CSRD introduces sustainability reporting requirements for certain non-EU undertakings with significant activities in the EU. Under Article 40a of the Accounting Directive, the EC is required to adopt dedicated ESRS for these undertakings. At the EC’s request EFRAG has developed the ESRS for certain non-EU Undertakings (ESRS-40a) Exposure Draft (ED). ESRS-40a ED is now open for public consultation until 31 October 2026. The feedback received will inform finalisation of EFRAG's technical advice to the EC. In parallel with the public consultation, EFRAG has launched a survey to collect feedback to inform a Cost-Benefit Analysis (CBA) of the ESRS-40a. The first sustainability reports prepared under the future ESRS-40a are expected to cover financial year 2028, with publication in 2029.
The suite of ESRS-40a comprise 12 standards, 2 cross-cutting and 10 topical standards, mirroring the ESRS structure. The standards focus only on impacts and as such do not include anticipated financial effects. Fair presentation remains the overall reporting objective, but the focus is only on material impacts and how they are managed. Definition of users, upstream and downstream value chain, incorporation by reference, and transitional provisions are the same as or aligned with ESRS. The ESRS-40a offers two reporting options, a global approach and a mixed approach. EFRAG's SRB prefers the global approach, citing concerns over the limited scope of the disclosure requirements under the mixed approach.
Following the Omnibus amendments, Article 40a applies to non-EU undertakings that: generate more than EUR 450 million net turnover in the EU during each of the last two consecutive financial years; and either have an EU branch generating more than EUR 200 million or are the ultimate parent of EU subsidiaries generating more than EUR 200 million. The largest share of the estimated 1,200 companies (down from around 10,000 pre-Omnibus) within scope of the ESRS-40a come from the US, followed by the UK, Switzerland and Japan and are some of the world’s largest multinational groups.
From the EU’s perspective, the ESRS-40a is about creating a level playing field. If large non-EU groups generate significant revenues in the EU, they should be subject to sustainability reporting expectations comparable to those applied to EU companies. But outside Europe many may see the ESRS-40a more as the EU extending its regulatory expectations beyond its borders.
During September 2026 EFRAG held a series of outreach events. The recording for the ESRS-40a ED: Public Outreach Event for American Stakeholders / AmCham EU – is here. Companies globally can join the ESRS-40a ED: Public Outreach Event for All Stakeholders on 12 October 2026.
To support stakeholders during the consultation, EFRAG has published the presentation, recording, and FAQs (see bottom of this webpage) from the webinar held to introduce the ESRS-40a. Interestingly the ED provides much flexibility in how to structure the sustainability report.
In this LinkedIn post, ISSB Vice-Chair Sue Lloyd explained that the ISSB is engaging with EFRAG to identify efficient ways for companies reporting using ISSB Standards that are also within the scope of ESRS-40a reporting for non-EU groups, to use an ISSB+ approach.
Many are concerned that the US will try to dilute the ESRS-40a. Frank Bold published this analysis that takes a closer look at the ED, describe the consequences of a “mixed approach” (including an uneven playing field, greenwashing risks, increased burden and reduced comparability of sustainability information), and explains why the bloc should not give in to pressure from the US. US law firm Ropes & Gray published this briefing looking at how the ESRS-40a will affect large US companies operating in the EU.
EFRAG Updates
The latest monthly sustainability and financial reporting podcast episodes are available on the EFRAG Spotify and YouTube channels. The latest monthly EFRAG Update report – summarizing recent public technical discussions and decisions taken, open consultations, future events, etc. – is here.
Connectivity Discussion Paper
The comment period for EFRAG’s Discussion Paper on Connectivity of Financial and Sustainability Reporting closed in late June 2026. In this LinkedIn Pulse article an EFRAG staff member suggests the goal should be complementarity rather than connectivity. In their response to EFRAG Accountancy Europe stress the similarities and differences between financial and sustainability reporting. On 4 September 2026 the Global Accounting Alliance published The Connected Reporting Landscape, the first in a series of publications prepared by GAA exploring the growing importance of connectivity in reporting, with a focus on the relationship between information in the financial statements and climate-related disclosures.
Greenwashing
On 8 September 2026 Accountancy Europe hosted a webinar on greenwashing risks: access the event recording and related materials here and read this report on the event by Corporate Disclosures.
Research
A new study, Demand for sustainability disclosures: evidence from web-tracking data of CSRD reports, that examines over 112,000 website visits to the first CSRD reports of eight large European firms indicates a wide readership. Sustainability disclosures attract about as much online traffic as financial ones (38% vs. 37% of page views) and the main audience are employees (32%), followed by investors and sustainability experts (both 18%).
