CSRD for Non-EU Companies: €150M EU Revenue Threshold Explained (2026)

Does CSRD Apply to Non-EU Companies?

Yes — the Corporate Sustainability Reporting Directive (CSRD) extends beyond EU-incorporated companies to non-EU parent groups through its "third-country undertaking" provisions in Article 40a of the revised Accounting Directive (2013/34/EU as amended by CSRD). This was a deliberate policy choice by the European Commission: any large group generating significant revenue from EU markets should disclose sustainability information on the same basis as EU groups.

The triggering mechanism is a combination of EU revenue and EU presence. A non-EU company that generates substantial EU revenue but has no EU entity at all is not caught by the CSRD third-country provisions — though it may still be required to provide sustainability data to EU customers and partners under other frameworks (EUDR, CBAM, supply chain due diligence under the EU Corporate Sustainability Due Diligence Directive).

The €150M EU Revenue Threshold: Exactly How It Works

A non-EU company triggers CSRD reporting obligations when all three of the following conditions are met:

Condition 1: €150M EU Net Turnover

The non-EU group generates net turnover exceeding €150 million in the EU in each of the last two consecutive financial years. "EU net turnover" means revenue attributable to the EU — revenue from customers or operations located in EU member states. A non-EU company with large global revenues but minimal EU presence is not in scope if EU revenue is below €150 million.

Condition 2: EU Presence

The non-EU parent must have at least one of the following EU entities:

• An EU subsidiary whose securities are listed on an EU regulated market (listed subsidiary)
• An EU subsidiary that is a large company (meeting at least 2 of: balance sheet >€25M; net turnover >€50M; >250 employees)
• An EU branch with net turnover exceeding €40 million

Condition 3: Consecutiveness

The €150M EU revenue threshold must be exceeded in each of the two consecutive financial years immediately preceding the reporting year — not just one year. A single year of high EU revenue followed by a drop below threshold does not trigger the obligation.

CSRD Reporting Waves: Where Non-EU Companies Fit

Which Sustainability Standards Apply to Non-EU Companies?

Non-EU companies subject to CSRD under Article 40a will report against the European Sustainability Reporting Standards (ESRS). The sector-agnostic ESRS are:

• ESRS 1: General requirements (materiality assessment methodology, double materiality)
• ESRS 2: General disclosures (governance, strategy, risk management, metrics)
• ESRS E1: Climate change (GHG emissions, Scope 1/2/3, transition plan)
• ESRS E2: Pollution (air, water, soil, substances of concern)
• ESRS E3: Water and marine resources
• ESRS E4: Biodiversity and ecosystems
• ESRS E5: Resource use and circular economy
• ESRS S1: Own workforce
• ESRS S2: Workers in the value chain
• ESRS S3: Affected communities
• ESRS S4: Consumers and end-users
• ESRS G1: Business conduct

Importantly, the European Commission may adopt separate, simplified ESRS for third-country undertakings — which could reduce the reporting scope compared to what EU companies must disclose. This is still under development as of 2026.

Double Materiality: The CSRD Disclosure Framework

CSRD requires a double materiality assessment: companies must assess both:

• Financial materiality (outside-in): How do sustainability risks and opportunities affect the company's financial performance, financial position and cash flows?
• Impact materiality (inside-out): How does the company's operations affect people and the environment, including in the value chain?

A topic is material under CSRD if it is material from either perspective — not both. This is broader than TCFD-style climate-only financial risk reporting, requiring non-EU companies to disclose on topics that may have no direct financial impact on them but where they have significant impacts on people or the environment.

What Non-EU Companies Can Do Now (Ahead of 2028)

1. Check if you're in scope: Calculate EU net turnover for the last two financial years. If approaching €150M, monitor closely.
2. Identify your EU entities: Map all EU subsidiaries and branches. Determine which, if any, independently trigger CSRD as large EU companies (Wave 2, from 2025).
3. Conduct a double materiality assessment: Even if the 2028 deadline feels distant, the materiality assessment drives the reporting scope — starting early gives you time to build data collection systems.
4. Build Scope 1/2/3 emissions data: ESRS E1 (climate) is typically the most data-intensive standard. GHG inventory for a group's EU operations is a multi-year data project.
5. Map your value chain: CSRD requires value chain disclosures — which suppliers, customers and other partners have material sustainability impacts?
6. Monitor EU subsidiary requirements: EU subsidiaries that independently meet large company thresholds are already in Wave 2 — their CSRD reporting is due for FY 2025 (published 2026), regardless of the non-EU parent's timeline.

Frequently Asked Questions