On 23 July 2026, the European Financial Reporting Advisory Group (EFRAG) published its 40a-ESRS Exposure Draft for non-EU companies (draft ESRS-40a) – formerly referred to as the N-ESRS or ESRS-TC), opening public consultation until 31 October 2026. In this blog, we share our key takeaways from the draft ESRS-40a for these so-called third country companies (which we will refer to as “Non-EU groups”). Article 40a CSRD introduces an alternative (lighter) reporting mechanism for non-EU groups pursuant to the draft ESRS-TC. EFRAG’s Basis for Conclusions confirms that non-EU groups benefit from the same phased-in transitional provisions as EU companies reporting under the standard ESRS for the first time. Notably, even though the obligation to prepare and implement a climate transition plan has been removed from the revised CSDDD, non-EU companies may still be required under Article 40a CSRD.