New EU legislation exempts 95% of Romanian companies from ESG reporting

A recent European Commission reform significantly reduces the number of Romanian companies required to report on environmental, social, and governance (ESG) performance. Under the Omnibus proposal, the number of companies subject to ESG reporting in Romania will drop from over 6,000 to just 300, marking a 95% reduction.

The revision of the Corporate Sustainability Reporting Directive (CSRD) now limits mandatory reporting to companies with more than 1,000 employees. This change exempts most small and medium-sized enterprises (SMEs), including those listed on the stock exchange, from ESG disclosure obligations. Across the European Union, the total number of companies affected by CSRD regulations is expected to decrease by 80%.

Impact on Romanian Businesses

For Romania, the policy adjustment will remove ESG reporting requirements for approximately 5,700 companies, leaving only large corporations, primarily multinationals, within the directive’s scope. The move is aimed at reducing administrative burdens for SMEs and allowing them to focus resources on direct sustainability measures rather than compliance paperwork.

“This reform is not a retreat from sustainability goals but a recognition of the need to balance regulatory requirements with economic realities,” said Răzvan Nica, founder of BuildGreen and CEO of Carbon Tool, a company specializing in sustainability consulting. “By streamlining reporting obligations, businesses can redirect funds toward carbon footprint reduction, energy efficiency improvements, and technological advancements that produce tangible economic and environmental benefits.”

Data from Eurostat places Romania 22nd among EU countries in terms of ESG reporting, with only 12% of SMEs currently using structured systems to monitor sustainability metrics. In contrast, in countries such as Sweden and Denmark, over 60% of SMEs voluntarily report ESG performance. The impact of the new policy will therefore vary across different European markets.

Strategic Adjustments for Businesses

Despite the exemption from mandatory ESG reporting, sustainability remains a critical factor for businesses, particularly for securing green financing. BuildGreen advises Romanian companies to maintain a proactive approach by adopting ESG practices voluntarily.

The company recommends:
• Implementing ESG systems: Even without reporting obligations, sustainability standards are key for businesses seeking financing aligned with environmental goals.
• Aligning with international frameworks: Voluntary compliance with CSRD, the Global Reporting Initiative (GRI), or the Task Force on Climate-Related Financial Disclosures (TCFD) can facilitate access to international markets.

BuildGreen and Carbon Tool plan to continue supporting Romanian businesses in integrating sustainability into their long-term strategies, offering consulting services and practical solutions for managing environmental impact efficiently.