CSRD for a US Parent With an EU Subsidiary: When Does the French Subsidiary Have to Report?

Under Article 40a of the Accounting Directive, as amended by Omnibus I, a French subsidiary of a US group must publish a sustainability report at the level of the US group only if two conditions are met. The subsidiary must have net turnover above EUR 200 million in the preceding financial year. And the US group must have generated net turnover in the EU above EUR 450 million in each of the last two consecutive financial years. The rule applies to financial years starting on or after 1 January 2028. Separately, the subsidiary may have to report on itself if it exceeds the general CSRD thresholds from FY2027.

Two routes into CSRD for an EU subsidiary of a US group

Finance teams often mix these up. The texts indexed in the CSRD & ESRS knowledge base describe two distinct obligations:

The Article 40a thresholds, read closely

• Group test: the third-country undertaking, at group level (or individual level if there is no group), "generated a net turnover in the Union exceeding EUR 450 000 000 for each of the last two consecutive financial years". The test uses EU turnover, not worldwide turnover, and both years must exceed the threshold.
• Subsidiary test: the subsidiary must, on its balance sheet dates, "exceed a net turnover of EUR 200 000 000 in the preceding financial year".
• Branch fallback: if the group has no qualifying EU subsidiary, an EU branch with net turnover above EUR 200 million in the preceding financial year carries the obligation.
• Ultimate parent: the rule targets subsidiaries whose ultimate parent is governed by the law of a third country, such as a Delaware corporation.

For context, Omnibus I recital 26 records the pre-Omnibus figures: EUR 150 million of EU turnover for the group and EUR 40 million for a branch. Omnibus I raised them to EUR 450 million and EUR 200 million, and set the subsidiary threshold at EUR 200 million.

What the Article 40a report must contain

The report covers the US group as a whole, not just the French entity. Article 40a lists the points of Article 29a(2) it must cover:

• the group's plans to make its business model and strategy compatible with the transition to a sustainable economy and with limiting global warming to 1.5°C, how its strategy takes account of stakeholders and impacts, and how the strategy has been implemented (points (a)(iii) to (a)(v));
• time-bound targets and progress (b), the role of governance bodies (c), policies (d) and sustainability-linked incentive schemes (e);
• due diligence, the principal adverse impacts and the actions taken to address them (f);
• where appropriate, related indicators (h).

Article 40b required the Commission to adopt dedicated standards for third-country undertakings by 30 June 2026. The base does not say whether they have been adopted. Article 40a(2) also allows the report to follow ESRS, or a framework recognised as equivalent by an implementing act.

Data, assurance and publication duties of the EU subsidiary

1. Ask the parent. If information is not available, the subsidiary must request everything it needs from the third-country undertaking.
2. Publish anyway if the parent does not deliver. The subsidiary publishes a report with all the information in its possession and states that the parent did not make the necessary information available.
3. Attach an assurance opinion from a person or firm authorised under the law of the third country or of a Member State. If the parent does not provide one, the subsidiary must say so in a statement.
4. Publish within 12 months of the balance sheet date, through the business register. If the register does not make it freely accessible, publish it on the subsidiary's website in at least one official EU language, free of charge.
5. Board responsibility. Members of the subsidiary's administrative, management and supervisory bodies have collective responsibility, to the best of their knowledge and ability, for drawing up and publishing the report (Article 40c).
6. ESAP. From 10 January 2028, the reports and related assurance opinions must also be submitted for the European single access point (Article 33a).

There is one derogation. If the third-country parent is a financial holding undertaking whose subsidiaries' business models and operations are independent of one another, the subsidiaries and branches may decide not to publish.

When the subsidiary is big enough to report on itself

If the French subsidiary exceeds EUR 450 million of turnover and 1,000 employees from FY2027, Articles 19a and 29a apply to it directly. It can be exempted if it is included in the US parent's consolidated sustainability reporting prepared under ESRS, or in a manner found equivalent by an implementing act (Article 19a(9)). The exemption comes with conditions:

• the subsidiary's management report names the parent, gives weblinks to the consolidated report and the assurance opinion, and states that it is exempt;
• the parent's consolidated report and assurance opinion are published in line with Article 30 and the subsidiary's national law;
• the EU Taxonomy Article 8 disclosures covering the EU subsidiary's activities are included, either in its management report or in the parent's consolidated report.

The base does not cover US rules, such as SEC disclosure requirements, or any equivalence decision that may later be adopted. Treat any assumption of equivalence with care.

Checklist for the EU finance team

• Pull the group's EU-only net turnover for the last two financial years.
• Check each EU subsidiary's net turnover for the preceding year against EUR 200 million, and its own turnover and headcount against the general thresholds.
• Plan the first Article 40a report for financial years starting on or after 1 January 2028.
• Agree with the US parent who provides the data and the assurance opinion, and when.
• Monitor how your Member State transposes Omnibus I, due by 19 March 2027.

Try the base with a question such as "What is the EU-wide net turnover threshold that triggers sustainability reporting for a non-EU parent group with EU subsidiaries or branches, and over what period must it be met?" Answers cite the consolidated Accounting Directive on EUR-Lex.

This article describes EU texts indexed on 5 October 2026. It is not legal advice. Thresholds and dates reach companies through national transposition.