Advancing the EU Sustainability Agenda: EFRAG Sets 2026 Work Programme

On April 24, 2026, the European Financial Reporting Advisory Group (EFRAG) submitted its 2026 Sustainability Reporting Work Programme to the European Commission, outlining its strategic priorities for advancing sustainability disclosure across the European Union.
The program provides a roadmap for EFRAG’s work on technical advice, implementation support, and capacity building, marking an important next phase in operationalizing the EU’s Corporate Sustainability Reporting Directive (CSRD) and strengthening the region’s sustainability reporting ecosystem.

From standard setting to implementation
EFRAG’s 2026 agenda reflects a clear shift from standard development to effective implementation and market uptake. While continuing its standard-setting role, EFRAG is placing increased emphasis on supporting companies—particularly small and medium-sized enterprises (SMEs)—in applying the European Sustainability Reporting Standards (ESRS) in practice.
The work program is structured around five core pillars:

  • Standard-setting and technical advice
  • Education and capacity building
  • Implementation support
  • Digitalization
  • Interoperability with global frameworks

This balanced approach signals a recognition that the success of sustainability reporting frameworks depends not only on robust standards, but also on practical guidance, accessible tools, and institutional readiness.

Expanding scope: non-EU companies 
A key priority for 2026 is the development of sustainability reporting standards for non-EU groups (N-ESRS) operating within the scope of the CSRD.
EFRAG plans to launch a public consultation in mid-July 2026, followed by the delivery of technical advice to the European Commission by January 2027. The process will include formal due process steps such as an exposure draft, outreach activities, and a cost-benefit analysis.
This initiative is particularly relevant for international companies with EU operations, as it will shape how non-European entities align with EU sustainability reporting requirements while maintaining consistency with global frameworks.

Supporting SMEs and ecosystem development
EFRAG continues to advance its “SME Ecosystem” workstream, building on the Voluntary Sustainability Reporting Standard for SMEs (VSME) issued in December 2024.
Planned activities for 2026 include:

  • Continued operation of the SME Forum
  • Development of practical guidance and tools
  • Outreach and capacity building across EU Member States
  • Mapping of digital platforms supporting sustainability reporting

This reflects a strong focus on inclusivity and scalability, ensuring that smaller organizations are equipped to participate in the transition to more transparent and standardized reporting practices.

Sequencing and regulatory alignment
EFRAG has also outlined sequencing assumptions for 2026, noting that certain consultations and deliverables will depend on pending regulatory developments. In particular, EFRAG does not expect to launch new public consultations before the European Commission adopts the relevant Delegated Acts on ESRS and voluntary standards, anticipated in June 2026.

This staged approach allows for better alignment between regulatory decisions and technical workstreams, reducing uncertainty for market participants.

Interoperability and digitalization
A central theme of the work program is strengthening interoperability with international frameworks, including ISSB standards, GRI, and the GHG Protocol. EFRAG also plans to advance key digital initiatives, including:

  • Updates to the ESRS XBRL taxonomy
  • Development of the ESRS Knowledge Hub

These efforts aim to support consistent, comparable, and digitally enabled disclosures, enabling organizations to align reporting processes across jurisdictions and meet growing expectations around data quality and assurance.

Implications for global markets
EFRAG’s 2026 priorities have direct implications for global companies, particularly those with operations in the EU. Beyond future reporting requirements, the work program highlights the need for organizations to prepare for:

  • Evolving interoperability between EU and global standards
  • Strengthened data governance and internal controls
  • Increased expectations around audit and assurance readiness

As sustainability reporting frameworks continue to converge, companies will need to adopt more integrated approaches to data, risk management, and disclosure.

Relevance for Beyond the Balance Sheet
EFRAG’s evoving work program reinforces a broader global trend: the transition from standard setting to implementation at scale.
For IFC’s Beyond the Balance Sheet (BBS) program, this shift is highly relevant. BBS supports jurisdictions and institutions in adopting and operationalizing sustainability reporting frameworks, including those aligned with ISSB standards.
EFRAG’s emphasis on interoperability, capacity building, and digital infrastructure reflects many of the same challenges faced by emerging markets—highlighting the need for coordinated, cross-border approaches to sustainability disclosure.

Looking ahead
As the EU moves into the next phase of sustainability reporting implementation, EFRAG’s 2026 work program provides a clear signal of priorities: practical application, global alignment, and ecosystem support.
The coming year, marked by consultations, guidance development, and continued standard refinement, will be critical in shaping how sustainability reporting delivers on its promise of greater transparency, comparability, and decision-useful information across markets.

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