On 20 August 2026, the Cabinet of Ministers of Ukraine re-approved a draft law amending the Law of Ukraine “On Accounting and Financial Reporting in Ukraine” to introduce sustainability reporting and submitted it to the Verkhovna Rada of Ukraine.
The Ministry of Finance developed the draft law as part of Ukraine’s commitments under the EU–Ukraine Association Agreement. The proposed changes are intended to align Ukrainian corporate reporting rules more closely with the EU framework, including Directive 2013/34/EU as subsequently amended.
The draft law was re-approved following the formation of a new Government. The previous draft law No. 13598, registered with the Verkhovna Rada on 4 August 2025, was withdrawn on 16 July 2026.
What does the draft law propose?
One of the key proposed changes is mandatory sustainability reporting under the European Sustainability Reporting Standards (ESRS).
Under the draft law, companies within its scope would be required to disclose information on the impact of their activities on the environment and society, employee and human rights, anti-corruption measures and corporate governance.
Sustainability information would be prepared in accordance with ESRS, included as a separate section of the management report and filed electronically using the relevant taxonomy.
According to information published by the Ministry of Finance, the reporting obligation would apply to large undertakings with net turnover exceeding EUR 450 million and an average of 1,000 employees.
The first reporting year is expected to be 2028.
How would the company size thresholds change?
The draft law also revises the financial thresholds used to classify undertakings as micro, small, medium-sized or large.
The proposed asset and net turnover thresholds are aligned more closely with updated EU rules:
- micro undertakings — total assets up to EUR 450,000 and net turnover up to EUR 900,000;
- small undertakings — total assets up to EUR 5 million and net turnover up to EUR 10 million;
- medium-sized undertakings — total assets up to EUR 25 million and net turnover up to EUR 50 million;
- large undertakings — total assets above EUR 25 million and net turnover above EUR 50 million.
The average employee headcount criterion for the respective company categories would remain unchanged.
The revised thresholds are intended to reflect inflation-driven growth in financial indicators and allow companies to be classified more accurately for the purposes of the applicable reporting requirements.
What would change for state-owned enterprises?
A separate part of the draft law addresses the public sector.
State unitary enterprises and companies in which the state holds more than 50% of shares or equity interests would be required to keep accounting records and prepare financial statements in accordance with International Financial Reporting Standards (IFRS).
They would also be required to prepare management reports on a regular basis.
These changes are intended to bring public-sector corporate reporting closer to international standards and improve transparency for investors, business partners and other users of financial information.
Sustainability reporting is part of a broader reform
Ukraine has been preparing to introduce sustainability reporting for several years.
In October 2024, the Cabinet of Ministers approved the Strategy for the Introduction of Sustainability Reporting by Enterprises. The Strategy envisages a phased introduction of ESRS-based reporting, development of the regulatory framework and creation of an assurance system for sustainability reporting.
The draft law re-approved by the Government in August 2026 continues the implementation of this Strategy and reflects current developments in European regulation.
For businesses, the reform is gradually translating ESG-related expectations into more specific requirements for data, internal processes, corporate governance and reporting.
What should businesses do before 2028?
The first reporting year is planned for 2028. Preparing sustainability reporting requires advance work on company data and internal processes.
Companies that may fall within the scope of the future requirements should assess their ESRS readiness in advance.
Practical preparation may include:
- mapping the ESG data the company already collects and identifying data gaps;
- assigning responsible persons and business functions;
- assessing ESG risks and material sustainability matters;
- reviewing corporate policies and compliance procedures;
- building processes for collecting, verifying and retaining ESG data;
- conducting a legal review of information that may be subject to disclosure;
- preparing accounting processes and documentation for sustainability reporting;
- adapting internal procedures to ESRS requirements.
An early readiness assessment can identify gaps before the first reporting period begins and provide a preparation roadmap tailored to the company’s structure and processes.
Smartsolutions supports sustainable development and ESG compliance projects. Our team helps businesses prepare for CSRD and ESRS requirements, develop corporate policies and compliance procedures, conduct ESG due diligence, structure contractual arrangements and supply chains, and provides legal, tax and accounting support for sustainability reporting.
In partnership with international consultancy Miltton, Smartsolutions combines legal, tax and financial expertise with capabilities in ESG strategy, double materiality assessment, reporting and corporate communications.
For companies that may fall within the future reporting requirements, the period before 2028 provides time to prepare processes, data and documentation for the new reporting framework in a structured way.
Frequently Asked Questions about Sustainability Reporting in Ukraine
When will mandatory sustainability reporting be introduced in Ukraine?
Under the draft law re-approved by the Cabinet of Ministers on 20 August 2026, 2028 is expected to be the first reporting year. Sustainability reporting would be prepared in accordance with the European Sustainability Reporting Standards (ESRS).
Which companies in Ukraine would be required to prepare sustainability reports?
According to information published by the Ministry of Finance, mandatory sustainability reporting is proposed for large undertakings with net turnover exceeding EUR 450 million and an average of 1,000 employees. The final requirements will depend on the wording of the law adopted by the Verkhovna Rada.
What information would companies have to disclose?
Sustainability reporting would cover the company’s impact on the environment and society, human and employee rights, anti-corruption measures and corporate governance. The draft law provides for this information to be prepared in accordance with ESRS.
What are ESRS?
ESRS, or European Sustainability Reporting Standards, set out the framework for corporate disclosures on environmental, social and governance matters. The draft law provides for the use of ESRS in preparing sustainability reporting in Ukraine.
How can Ukrainian businesses prepare for sustainability reporting?
A useful starting point is an ESRS readiness assessment: identify which ESG data is already collected, who is responsible for it, where data gaps exist and which internal processes need to be adapted. Further steps may include reviewing corporate policies and compliance procedures, assessing ESG risks, establishing data collection and verification processes, and preparing the legal and accounting framework for reporting.
Where can businesses get support with ESG and sustainability reporting?
Smartsolutions supports companies preparing for ESG, CSRD and ESRS requirements, from readiness assessments and corporate policy development to ESG compliance, legal and accounting support for reporting, ESG due diligence and tax advice related to sustainable development.
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