The CSRD fully retooled sustainability reporting in the EU, and is set to continue shaking up global reporting. In addition to covering EU businesses, the CSRD also requires parent level company reporting for certain entities. This requirement applies to in-scope parent companies regardless of where they are headquartered. The first of these reports will be required in 2028 on 2027 data, and companies should prepare for a heavy lift. A recent Linklaters memo dives into non-EU company requirements and gives the following compliance tips:
- “In-scope non-EU companies should start preparing now. Although both the main ESRS and N-ESRS are still being updated or in development, and no equivalence decisions have been taken yet on non-EU sustainability reporting frameworks, companies not yet reporting under the CSRD should begin mapping their data gaps, assurance arrangements and governance structures now, rather than waiting for the final standards to be adopted.
- Companies outside the CSRD scope should prepare for value chain data requests. Companies that fall outside the direct scope of the CSRD are likely to receive requests for sustainability data from in-scope EU customers and business partners. Building sustainability data collection capabilities now will put companies in a strong position to respond when those requests arrive.
- Watch for conflicts between ESRS and local standards or laws. The European Financial Reporting Advisory Group (EFRAG) has published interoperability guidance on the alignment of the ESRS with the ISSB standards (the latter being used across many non-EU jurisdictions), but meaningful differences remain – notably in the approach to materiality and available reliefs. In some jurisdictions, domestic rules may create direct tensions with CSRD that will need careful navigation.”
The memo notes that non-EU companies will be working with a tailored standard, not the typical ESRS. That standard is currently in development by EFRAG and is expected to be released in July 2026. With deadlines only two years out, reporting entities will need to act quickly once the new standards are issued.
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