Romania is taking a decisive step toward integrating the EU’s Corporate Sustainability Reporting Directive (CSRD) through the triple regulatory framework simultaneously established by the Ministry of Finance through Order No. 85/2024, the Financial Supervisory Authority through Norm No. 4/2024, and the National Bank of Romania through Order No. 1/2024.
These regulations require companies meeting certain criteria (such as being listed entities with over 500 employees) to prepare sustainability reports starting from the fiscal year ending December 31, 2024.
Introduction of the Romanian Sustainability Code
The Romanian Sustainability Code is a national framework designed to guide companies in Romania through transparent and standardized sustainability reporting. It aligns with international best practices and supports the country’s commitment to the United Nations’ Sustainable Development Goals under the 2030 Agenda. The framework establishes comprehensive corporate reporting requirements based on Global Reporting Initiative Universal Standards, implemented through a centralized governmental online platform, with assessment criteria strategically organized into four fundamental categories: strategy, process management, environment, and society. This initiative supports the National Strategy for Sustainable Development and encourages companies to systematically evaluate and report their sustainability practices.
The code’s reporting framework structures corporate environmental governance into four interconnected pillars: (1) strategic vision that embeds sustainability into business DNA, (2) process management that ensures accountability through governance and risk assessment, (3) environmental stewardship that scrutinizes ecological footprints, and (4) societal impact that recognizes business success extends beyond profit to people and communities. Each category includes specific criteria and performance indicators, accompanied by checklists to assess compliance levels. These represent the structure of how companies should organize and present their sustainability practices.
Benefits and Challenges for Companies
Romania’s framework delivers a triple advantage to forward-thinking companies: (1) building stakeholder trust through unprecedented public disclosure, (2) providing strategic clarity through methodical sustainability assessment, and (3) creating distinctive market positioning for businesses that authentically embrace environmental responsibility as a competitive differentiator. In addressing the new reporting framework, companies might face substantial challenges in collecting comprehensive data from their operations and supply chains for the assessment of environmental impacts, social policies, and governance structures, as well as in developing internal capacities through staff training and establishing necessary processes to ensure accurate and efficient sustainability reporting.
Implementation of the Corporate Sustainability Due Diligence Directive (CSDDD)
The EU’s CSDDD, adopted in July 2024, imposes due diligence obligations on companies to identify and mitigate adverse human rights and environmental impacts within their operations and supply chains. Romania, as an EU member state, is required to transpose this directive into national law by July 26, 2026. The new ESG reporting requirements in Romania are being implemented in phases, depending on company size and public interest status. Approximately 5,300 companies in Romania will be required to prepare sustainability reports starting in 2025, marking an expansion of the non-financial reporting framework that begins in 2024 for listed entities with over 500 employees but which will embrace a much wider spectrum of organizations that meet at least two of the dimensional criteria established by recent regulations: total assets of minimum RON 25 million, net turnover of at least RON 50 million, or a workforce exceeding 50 employees.
The Reports Content represents the substance of what must be disclosed, in accordance with CSRD and international standards.
From an environmental perspective, information must be aligned with 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. The social pillar provides information on equal opportunities, working conditions, and human rights. And the governance pillar encompasses the perspective on the composition and role of governing bodies, internal controls, risk management, business ethics, and corporate culture.
The report must be included in the administrators’ report as part of the financial statements and will require certification by an independent auditor, who will issue a limited assurance opinion. Subsidiaries whose sustainability information is included in the consolidated management report of another company may be exempted if the parent company’s details and the location of the consolidated report are disclosed. Companies are expected to report on sustainability aspects across their entire value chain. If complete information is unavailable, they must detail the efforts made to obtain it, reasons for any gaps, and plans to acquire the necessary data within the first three years of the reporting requirements.
Sustainability reporting is becoming a central aspect of corporate strategy, influencing investor decisions, customer perceptions, and overall corporate reputation.
By Ioana Hategan, Managing Partner, Hategan Attorneys
This article was originally published in Issue 12.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.