CSRD third-country group reporting Article 40a FAQ

Article 40a applies only when both the third-country undertaking test and an EU presence test are met. At group level, or individual level if group-level reporting does not apply, the third-country undertaking must have generated more than EUR 450 million net turnover in the Union in each of the last two consecutive financial years.

A qualifying EU subsidiary exceeded EUR 200 million net turnover in the preceding financial year. A branch qualifies at the same turnover level only if the third-country undertaking has no qualifying EU subsidiary. The reporting requirement starts with financial years beginning in 2028.

The Article 40a report is published through a qualifying EU subsidiary or, if there is no qualifying EU subsidiary, a qualifying EU branch. A subsidiary publishes a report covering the ultimate third-country parent at group level. A branch publishes a report covering the third-country undertaking at group level, or at individual level if group-level reporting is not applicable.

The EU subsidiary or branch must publish and make the report accessible, but Article 40a does not expressly assign preparation to that entity. The third-country parent may prepare the report, or the EU entity may prepare it on the parent's behalf. Commission guidance says at least one report must be disclosed by a subsidiary or branch in each Member State concerned; national law may allow one entity to comply by linking to a report published by another EU subsidiary or branch.

Article 40a does not let the EU subsidiary or branch stay silent because the third-country undertaking withholds information. The subsidiary or branch must request the information needed to meet its obligation.

If not all required information is provided, the EU subsidiary or branch must publish the report using the information it has, and issue a statement that the third-country undertaking did not make the necessary information available.

Yes. Member States must require the Article 40a sustainability report to be published with an assurance opinion from a person or firm authorised to give an opinion on sustainability reporting assurance under the law of the third-country undertaking or of a Member State.

If the third-country undertaking does not provide the assurance opinion, the EU subsidiary or branch must issue a statement that the necessary assurance opinion was not made available.

The Article 40a reporting route applies for financial years beginning in 2028. Article 40d requires the EU subsidiary or branch to publish the report, assurance opinion, and any applicable Article 40a(2) missing-information statement within 12 months after the balance-sheet date for the reported financial year.

Publication follows the process provided by the relevant Member State. If the documents are not freely available through the business register, they must be made available free of charge on the subsidiary's or branch's website in at least one official EU language by the same 12-month deadline. Confirm the applicable language, register, website, and filing mechanics under national law.