Recital (26)

Pursuant to Article 40a(1), fourth and fifth subparagraphs, of Directive 2013/34/EU, certain subsidiaries in the Union of a third-country undertaking that generates a net turnover of more than EUR 150000000 in the Union, or, in the absence of such subsidiaries, branches in the Union of a third-country undertaking that generate a net turnover of more than EUR 40000000, are to publish and make accessible sustainability information at the group level, or, if not applicable, the individual level, of the third-country undertaking. To relieve the burden on third-country undertakings in a similar proportion to the reduction in burden on undertakings subject to Articles 19a and 29a of that Directive, the net turnover threshold for the third-country undertaking should be raised from EUR 150000000 to EUR 450000000. In addition, for reasons of burden reduction, the size of a subsidiary of a third-country undertaking and a branch of a third-country undertaking for such subsidiaries and branches to fall within the scope of Directive 2013/34/EU as regards sustainability reporting should also be adjusted. The net turnover threshold for the subsidiary of a third-country undertaking and the branch of a third-country undertaking should be set at EUR 200000000. The reporting requirements for the subsidiary of the third-country undertaking or the branch of the third-country undertaking under Article 40a are different from the reporting requirements for undertakings under Articles 19a and 29a. The subsidiary of the third-country undertaking or branch of the third-country undertaking subject to Article 40a is only required to publish and make available the sustainability report provided by the third-country undertaking, whereas undertakings subject to Articles 19a and 29a are required to report on their own behalf. It is therefore not necessary to apply the same thresholds when identifying which subsidiaries or branches are subject to the reporting requirements under Article 40a and which undertakings are subject to the reporting requirements under Article 19a and 29a. Furthermore, to ensure a level playing field, third-country parent undertakings which are financial holding undertakings whose subsidiaries’ business models and operations are independent of one another should be allowed not to publish and make accessible a sustainability report in accordance with Article 40a.