EFRAG consultation on sustainability reporting standards for non-EU groups

Norges Bank Investment Management (NBIM) is the investment management division of the Norwegian Central Bank (Norges Bank). We are responsible for investing the Norwegian Government Pension Fund Global. As of year-end 2025, we managed EUR 1.79 trillion in assets, invested in the shares of 7,201 companies across 67 countries. As a long-term, global investor, we believe our returns depend on sustainable development in economic, environmental and social terms.

We appreciate the opportunity to respond to the consultation by the European Financial Reporting Advisory Group (EFRAG) on the ESRS-40a Exposure Draft. This response builds on our engagement throughout the simplification of the European Sustainability Reporting Standards (ESRS).[1] ESRS-40a will apply from financial year 2028 to non-EU groups with significant activity in the EU, setting out the sustainability information they must report under the Corporate Sustainability Reporting Directive (CSRD). Unlike the ESRS that apply to EU companies, it covers only companies’ impacts on people and the environment, not how sustainability matters affect the companies themselves (sustainability-related risks and opportunities). The CSRD does not require non-EU groups to report on the latter.[2]

Many of our largest holdings are non-EU groups likely to fall within the scope of ESRS-40a. A growing number of them report, or will soon report, on sustainability-related risks and opportunities under the standards issued by the International Sustainability Standards Board (ISSB), known as the ISSB Standards, either directly or through local standards based on them. We have long supported the ISSB Standards as the global baseline for sustainability reporting, given their focus on information that is material to investors.

For groups that already report under the ISSB Standards, ESRS-40a will add a further set of requirements. Although the two frameworks have different objectives, they overlap considerably, particularly on climate, where both require information on matters such as greenhouse gas emissions, targets and transition plans. As an investor, we therefore have two main interests in how they fit together. First, companies that report under the ISSB Standards should be able to meet ESRS-40a as efficiently as possible. Reporting the same information twice or in different ways would add to their burden and make companies harder to compare across markets. Second, the resulting report should remain understandable for investors such as ourselves, who rely on the financially material information it contains. Our response focuses on interoperability between ESRS-40a and the ISSB Standards with these two aims in mind.

Overall, we welcome EFRAG’s proposals in this area, which already support both aims. They allow companies to build on their ISSB reporting and add the disclosures ESRS-40a requires (the “ISSB+” approach). Companies could do so either through a single report that meets both sets of standards, or by referring to information already published in other reports (incorporation by reference). This is in line with the ISSB’s building-block approach, under which the ISSB Standards provide a global baseline that jurisdictions can add to. Because companies can reuse the reporting they already prepare, the proposals also encourage wider adoption of the ISSB Standards. As currently drafted, however, the approach would be available to fewer groups than intended. To help this approach work in practice, we would encourage EFRAG to:

• Widen the reports companies can build on. We would welcome confirmation that companies can base their reporting on the ISSB Standards as issued by the ISSB, including where they apply them voluntarily or instead of a local version. At present, companies can only incorporate by reference reports that are required by law. This excludes, for example, groups that report under the ISSB Standards, or local standards based on them, voluntarily or before their local requirements come into force, as well as groups that choose the ISSB Standards as issued over a local version. We therefore suggest allowing incorporation by reference even where the report is not legally required, whether it is prepared under the ISSB Standards as issued or under local standards based on them. The content table that companies must provide when a large part of the report is incorporated by reference could usefully apply to these reports as well.
• Make the level of assurance visible. As more types of reports become eligible, investors will need to be able to judge how reliable the referenced information is. Some of these reports may not be subject to the same level of assurance as the rest of the ESRS-40a report. Rather than excluding them, we would suggest that companies state clearly what level of assurance applies to each referenced source.
• Allow ISSB disclosures to be used as they are. ESRS-40a sometimes treats matters that the ISSB Standards also cover differently, such as time horizons.[3] Companies may then need to adjust their ISSB disclosures or report the same information twice. It would be helpful to confirm that companies applying the ISSB Standards as issued by the ISSB can use those disclosures unchanged wherever ESRS-40a requires information on the same matter. They would then add any other impact information that is material under ESRS-40a.
• Simplify how the ESRS-40a information is identified. As drafted, ESRS-40a appears to require companies preparing a single report to label each disclosure according to whether it meets both sets of standards, ESRS-40a only, or the ISSB Standards only. Neither framework requires this level of detail elsewhere and, in our view, it would add work for companies without making the report more useful to investors or other readers. Information for investors does need to be identifiable, but it should be sufficient for the ESRS-40a information to be clearly identifiable, as the Exposure Draft already requires in line with ESRS. We would therefore suggest that companies should not be required to label ISSB-only information separately. An appendix to ESRS-40a listing the additional disclosures that companies starting from the ISSB Standards may need to provide would also help them apply the standard consistently and, where they use incorporation by reference, prepare the content table.

We believe that allowing companies to build efficiently on their ISSB reporting, while keeping the resulting report understandable for investors, would best serve both investors and companies. We value EFRAG’s work on ESRS-40a and its ongoing cooperation with the IFRS Foundation, and we hope our perspective is helpful as EFRAG finalises its advice. Our answers to the relevant questionnaire questions are set out in the Appendix.

Thank you for considering our perspective. We remain available for further discussion.

Yours sincerely

Carine Smith Ihenacho
Chief Governance and Compliance Officer

Dr Shilpi Nanda
Senior Policy Advisor

[1] See our responses to EFRAG's calls for input on the revision of the ESRS (May and September 2025) and to the European Commission's consultation on the draft revised ESRS (June 2026).

[2] These requirements are set out in Article 40a of the Accounting Directive (Directive 2013/34/EU), which was added by the CSRD.

[3] ESRS-40a sets fixed time horizons for reporting purposes: the short term is the period covered by the financial statements, the medium term runs up to five years beyond that, and the long term is more than five years. The ISSB Standards instead require companies to explain how they define these time horizons themselves.