Japan Comments on Draft ESRS for Non-EU Companies
Overview
The Japanese government issued a comment letter dated October 28, 2026, on the Draft European Sustainability Reporting Standards for non-EU companies (ESRS-40a), published by EFRAG on July 23, 2026. The letter proposes clarifying the additional disclosures specific to ESRS-40a for referring to reports prepared under standards functionally aligned with ISSB Standards, and considering an alternative mixed approach that can reduce reporting burdens while reporting EU-related impacts.
Key points
- The Japanese government issued a comment letter on the draft ESRS-40a.
- It proposed clarifying the additional disclosures specific to ESRS-40a.
- It called for considering an alternative approach that reduces burdens while reporting EU-related impacts.
Overview
On July 23, 2026, EFRAG published the Draft European Sustainability Reporting Standards for non-EU companies (ESRS-40a).
The Japanese government's comment letter presented proposals on the draft and welcomed the incorporation of the use of ISSB Standards and the mixed approach concept.
Details
The first proposal is to clarify the additional disclosures specific to ESRS-40a so that non-EU companies can refer, in sustainability reports prepared under ESRS-40a, to reports prepared under standards functionally aligned with ISSB Standards.
The second proposal is to consider a simpler alternative to the mixed approach in the draft, enabling non-EU companies to reduce reporting burdens while reporting EU-related impacts.
The additional proposals are intended to improve the effectiveness of the concepts reflected in the draft and help reduce the practical burden on non-EU companies.