In recent years, sustainability has become one of the basic principles governing the way economies and societies think and plan their development. At the level of the European Union, the Green Deal creates an essential platform for the alignment of member states, and the subsequent initiatives, Fit for 55 and the recent Corporate Sustainability Reporting Directive (CSRD), targeting no less than 50,000 companies throughout the community space, is designed to ensure a coherent and unitary implementation.
What do Romanian companies need to know?
The CSRD was transposed at the local level by the Order of the Minister of Finance no. 85/2024, the Financial Supervisory Authority (ASF) norm no. 4/2024, and NBR Order no. 1/2024. According to these regulations, listed companies with more than 500 employees must prepare the sustainability report from the year ending 31 December 2024. In 2025, this requirement extends to companies that meet, according to provisions updated in August 2024, two of the following three criteria: total assets of at least RON 25 million; turnover of at least RON 50 million; respectively, more than 50 employees. The companies that apply the ASF Norm and the BNR Order follow the criteria included in these regulations. Under these conditions, it is expected that, in Romania, around 5,300 companies will have to draw up sustainability reports in 2025, which requires a remarkable effort of documentation and effective measures for compliance, following a relatively short calendar.
The topics addressed by the sustainability reporting refer to environmental issues, as well as social and governance aspects. With regard to environment, the reporting must include items aligned to the six objectives of the EU taxonomy - climate change mitigation and adaptation, pollution, water and marine resources, biodiversity and ecosystems, resource use and circular economy. For social aspects, information to be included in the reports refers to equal opportunities, working conditions and human rights. As for governance, reporting requirements cover the composition and role of governing bodies, internal controls and risk management systems, business ethics and corporate culture, etc.
Reporting requires a transparent and rigorous approach, given that the sustainability report will be part of the financial statements, being included in the administrators’ report, and will have to be certified by an independent auditor, who will issue a limited assurance opinion on it.
The legislation in force also provides certain exceptions from preparing this report in the case of subsidiaries whose sustainability information is included in the consolidated management report of another company. This exemption applies provided that the subsidiary’s administrators’ report includes information such as the name and registered office of the parent company reporting information at group level, links to the parent company’s consolidated management report, and the related limited assurance opinion, as well as the mention that the subsidiary in question is exempted from reporting obligations.
Another aspect worth mentioning is that the information presented in the sustainability report does not only refer to the reporting company, but to its entire value chain, which implies a considerable effort to collect this data. However, where all the necessary information on the value chain is not available, companies can provide data on the efforts made to obtain that information, the reasons why it could not be obtained, and how they intend to proceed in the future to obtain them, within the first three years of application of the reporting requirements.
In conclusion, information related to sustainability is a current topic on the local and European business agenda, and the complexity of the reporting framework is expected to evolve in the coming years. Preparing to report according to the legal requirements is therefore an extensive process, which requires both prompt information and the allocation of financial resources, as well as the involvement of the organization’s leadership to set the tone for the transformation and create commitment among their teams.
On the other hand, given that sustainability reporting is a topic that will change the dynamics of annual reporting of commercial companies, it becomes obvious that the results presented will have a significant and increasingly greater impact on the entire ecosystem surrounding the company, influencing potential investors as well as customers and collaborators.
