Draft Law No. 15538:

What Changes Does the Government Propose for ESRS Sustainability Reporting?

Draft Law No. 15538: What Changes Does the Government Propose for ESRS Sustainability Reporting?
On 21 August 2026, the Cabinet of Ministers submitted Draft Law No. 15538 to the Verkhovna Rada. For the first time, it proposes introducing a statutory requirement for Ukraine’s largest companies to report on their environmental, social and governance impacts in accordance with the European Sustainability Reporting Standards (ESRS). The requirement would apply to companies with turnover exceeding EUR 450 million and more than 1,000 employees, with 2028 expected to be the first reporting year. We explain how Ukraine reached this point, what exactly the new draft law proposes, and which companies should start preparing and when.
 

Ukraine’s path to mandatory sustainability reporting

The development of non-financial reporting in Ukraine began long before the current draft law. In September 2019, Presidential Decree No. 722/2019 committed Ukraine to achieving the Sustainable Development Goals by 2030. However, the Decree provided only an overarching policy framework and imposed no reporting obligations on businesses.

The next significant step came five years later. In October 2024, by Order No. 1015-r, the Government approved the Strategy for the Introduction of Sustainability Reporting by Enterprises and the Operational Plan for its implementation for 2024–2026. The Strategy envisaged establishing the regulatory framework and launching the first phase of ESRS reporting by 2026. During the second phase, from 2026 to 2030, the scope of reporting was to expand and auditor assurance was to become mandatory.

To implement the Strategy, in February 2025 the Ministry of Finance published draft amendments to the Law of Ukraine “On Accounting and Financial Reporting in Ukraine” for public consultation. On 26 June 2025, the Government registered Draft Law No. 13425 with the Verkhovna Rada. It envisaged a phased introduction of reporting in three waves: first, large enterprises with more than 500 employees; then the remaining large companies and groups; and finally small and medium-sized enterprises whose securities are traded on a regulated market.

However, the draft law remained active for only a few days: it was withdrawn on 30 June 2025 and removed from consideration on 17 July. Meanwhile, in August 2025, a group of MPs registered alternative Draft Law No. 13598-1 on sustainability reporting. It remains under consideration by the relevant committee, and on 1 September 2026 it was included in the parliamentary session agenda.

Meanwhile, the European rules themselves changed. The EU adopted the Omnibus simplification package, which significantly raised the thresholds for companies reporting under the Corporate Sustainability Reporting Directive (CSRD). The Government reflected these changes, set out in Directive (EU) 2026/470, when it approved a new version of the draft law on 20 August 2026 and submitted it to the Verkhovna Rada the following day as Draft Law No. 15538. Draft Law No. 15540 on the audit and assurance of sustainability reporting was submitted alongside it.

 

Timeline for the introduction of sustainability reporting in Ukraine

Date What happened?
30.09.2019 Presidential Decree No. 722/2019 on Ukraine’s sustainable development goals through 2030
18.10.2024 CMU Order No. 1015-r: Strategy for the introduction of sustainability reporting and operational plan for 2024–2026
07.02.2025 The Ministry of Finance published draft amendments to the accounting law for public consultation
26.06.2025 Government Draft Law No. 13425 registered; withdrawn on 30.06.2025 and removed from consideration on 17.07.2025
21.08.2025 MP Draft Law No. 13598-1 registered; included in the parliamentary session agenda from 01.09.2026 
21.08.2026 Government Draft Laws No. 15538 (accounting and reporting) and No. 15540 (audit and assurance) registered

What draft law No. 15538 would change

The draft law amends the Law of Ukraine “On Accounting and Financial Reporting in Ukraine” and aligns it with Directive 2013/34/EU, as amended by Directives 2022/2464 (CSRD), 2023/2775 and 2026/470. The key change is that sustainability reporting would become mandatory rather than a voluntary practice adopted by individual companies.

New concepts introduced into law

The draft law introduces a dedicated set of definitions. “Sustainability matters” are defined as environmental, social and governance matters, including employment relations, respect for human rights and anti-corruption. It also introduces the concepts of “sustainability reporting standards” and “standards for voluntary use”, referring to documents adopted by the European Commission, as well as a “sustainability reporting taxonomy” for electronic filing. The management report would also be required to include information on sustainability matters.

How sustainability reporting would be prepared and filed

The draft law would add a new Article 12² “Sustainability Reporting”. Reports would be prepared in accordance with ESRS, with Ukrainian translations to be published by the Ministry of Finance on its website. Sustainability information would have to be presented as a separate section of the management report, in a single electronic format using the relevant taxonomy. Crucially, the sustainability report would have to be filed and published together with the assurance report, within the same deadlines as the financial statements. Parent companies would be required to publish consolidated sustainability reporting on their websites by 1 June. 

Reporting exemptions for groups of companies

The draft law sets out detailed reporting rules for groups. A subsidiary may be exempt from separate reporting if it is included in the parent company’s consolidated reporting. However, it would have to publish the parent company’s report by 1 June. A separate exemption is provided for pure financial holding companies, but only where four conditions are met simultaneously. A company acquired during the year may be excluded from the report for the year of acquisition; however, acquisitions, reorganisations and disposals that are material to the group’s risks and impacts would have to be disclosed.

Responsibility within the company

The proposed amendments to Article 8 would place responsibility for organising the preparation of the management report and sustainability reporting on the owner or a body authorised by the owner. A company would determine its own data collection procedures and the responsibilities of employees involved in preparing the reporting, while the company’s head or owner would be responsible for filing and publication. In other words, reporting would no longer be solely a task for the communications team or ESG manager; it would become a corporate governance matter. 

Who would regulate sustainability reporting

The Ministry of Finance would be authorised to shape sustainability reporting policy and approve the preparation procedures, content and forms of such reporting. The Cabinet of Ministers would determine filing procedures and deadlines, while the National Bank of Ukraine would do so for banks and non-bank financial institutions under its supervision. Ministry of Finance regulations implementing EU law would not be subject to regulatory policy legislation, which is intended to accelerate their adoption.


How draft law No. 15538 differs from No. 13425

The most significant difference between draft laws No. 13425 and No. 15538 is the number of companies that would be required to report. The Green Transition Office estimated that around 3,000 Ukrainian enterprises would have fallen within scope under the previous CSRD criteria, compared with only about 330 under the updated thresholds.

Comparison of draft laws No. 13425 and No. 15538

Parameter
No. 13425 (2025)
No. 15538 (2026)
Entities subject to mandatory reporting
Large enterprises and groups; listed small and medium-sized enterprises
Turnover above EUR 450 million and more than 1,000 employees
Phasing
Three waves
One wave
First reporting year
2027–2029 (2028–2030 according to various sources)
2028
Effective date
01.01.2026
01.01.2027
Reporting assurance
Auditor’s report required
Separate draft law No. 15540

   

The reporting format remains unchanged: ESRS, a separate section within the management report and an electronic taxonomy. The transition of state-owned enterprises to International Financial Reporting Standards (IFRS) and the revised enterprise size criteria also remain in place. The category thresholds are as follows: micro-enterprises, up to EUR 450,000 in assets and EUR 900,000 in turnover; small enterprises, up to EUR 5 million and EUR 10 million respectively; medium-sized enterprises, up to EUR 25 million and EUR 50 million; and large enterprises, above those thresholds. A new feature is that the category would be determined using figures for the reporting year; in 2027, this would be based on 2026 data.


Sustainability reporting assurance: draft law No. 15540

Sustainability reporting loses value for investors without independent assurance, which is why the Government simultaneously proposed amendments to the Law of Ukraine “On the Audit of Financial Statements and Auditing”. The draft introduces the status of sustainability auditor, requiring candidates to pass an examination covering four areas and complete eight months of practical training. Assurance would be performed in accordance with the limited assurance standards applied in the EU.

An audit firm providing these services would be required to employ at least seven auditors, including at least two sustainability auditors, and to be listed in the relevant section of the register. Quality control reviews would be conducted once every three years. An important market restriction is that a firm providing assurance to a public-interest entity would not be permitted to prepare that entity’s sustainability reporting at the same time. The company’s audit committee would be required to oversee the reporting process, including the process used to determine which information should be disclosed under ESRS.

Who should prepare for ESRS reporting and when

The draft law still has to pass through the Verkhovna Rada, and its provisions may change. However, the overall direction is already clear, and companies likely to fall within scope have limited time to prepare. The first reporting year would be 2028, meaning that ESRS data would need to be collected from 1 January 2028. In our experience, establishing the necessary processes and data systems and carrying out a materiality assessment for a company with a complex structure takes at least 12–18 months.

Who would report under draft law No. 15538 and when

Category
Timing
Requirement
Large companies: turnover above EUR 450 million and more than 1,000 employees
2028 reporting year; filed together with the financial statements in 2029
ESRS reporting with assurance
Parent companies of large groups
Same deadlines; consolidated report published on the website by 1 June
Consolidated ESRS reporting
Group subsidiaries
Same deadlines
May be exempt from separate reporting but should publish the parent company’s report by 1 June
State-owned enterprises with state ownership above 50%
From the effective date of the law
IFRS and a management report; below the thresholds, standards for voluntary use or ESRS
Other enterprises
—
Voluntary; in practice, in response to requests from banks, investors and EU partners із ЄС


  

Large companies and groups

For these companies, 2026–2027 is the preparation period, and work should begin now. We recommend the following steps:

  • Check whether the company or group meets both thresholds, considering the new rules for determining enterprise size categories.
  • Conduct a double materiality assessment and a gap analysis comparing current practices with ESRS requirements.
  • Assign responsibility at owner and management level and formalise data collection procedures in internal documents.
  • Establish a system for collecting, controlling and documenting ESG data, including across the value chain.
  • Prepare a “dry-run” report in 2027 and prepare for assurance so that 2028 reporting can be completed without unnecessary time pressure.


State-owned enterprises

For state-owned companies, the draft law would involve a dual transformation: a transition to IFRS and a mandatory management report regardless of size. Even companies below the thresholds would have to report on sustainability using the standards for voluntary use. These companies should therefore plan financial reporting transformation and ESG reporting projects in parallel and budget for them in advance.

Subsidiaries and small and medium-sized businesses

Most Ukrainian companies would not fall within the scope of mandatory reporting. That does not mean, however, that they will not need ESG data. Subsidiaries of large groups will provide data for their parent companies’ consolidated reports. European customers, banks and international financial institutions are increasingly likely to ask suppliers and borrowers for information on emissions, working conditions and anti-corruption procedures. For this group, the Voluntary Sustainability Reporting Standard for SMEs (VSME) offers a practical starting point, enabling companies to respond to such requests systematically without creating a disproportionate reporting burden.

Audit market

For auditors, draft law No. 15540 would introduce new requirements relating to qualifications, staffing and independence. Firms planning to provide sustainability reporting assurance should already be preparing specialists for certification and reviewing their service portfolios to account for restrictions on combining advisory and assurance services. 

Conclusion

After several years of strategies, consultations and withdrawn proposals, Ukraine now has a draft law closely aligned with the EU’s updated rules. It would apply to significantly fewer companies than the previous version, but those within scope would face comprehensive requirements: ESRS reporting, an electronic format and mandatory independent assurance. For the largest companies and the public sector, preparations should already be under way, while for other businesses ESG data is increasingly becoming a prerequisite for access to European markets and financing. 

Need advice on preparing for sustainability reporting? Contact BDO in Ukraine team.

Key Findings:

  • For the first time, Ukraine is proposing to make sustainability reporting mandatory for the largest companies through legislation. Reporting would be prepared in accordance with ESRS, filed electronically and subject to independent assurance.
  • Significantly fewer companies would fall within the new requirements than previously envisaged: mandatory reporting is primarily proposed for enterprises with turnover exceeding EUR 450 million and more than 1,000 employees, with 2028 planned as the first reporting year.
  • Companies should begin preparing in 2026–2027, as they will need to conduct a double materiality assessment, establish ESG data collection processes, assign responsibilities and prepare for assurance of their reporting.
  • Even businesses outside the scope of mandatory reporting will feel the impact of ESG requirements: banks, investors, international partners and large groups are increasingly likely to request environmental, social and governance data.

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