CSRD (Corporate Sustainability Reporting), EU Taxonomy (EU Taxonomy) and SFDR (Sustainable Financing Disclosure Regulation) are a trio of regulations that are transforming the way sustainable financing is done at the level of the European Union.
These regulations create a coherent and effective framework that empowers stakeholders to make more informed and responsible choices and move towards a more transparent and accountable corporate environment.
The EU taxonomy serves as a foundation for sustainable activities, with the CSRD and SFDR building on this through aligned disclosure requirements.
These regulations are transposed into Romanian legislation. Sustainable finance and reporting serve as key tools in the EU to promote responsible business practices, boost sustainability and promote innovative solutions to environmental challenges.
Sustainability reporting is the annual reporting by companies on the impact, risks and opportunities that their activities have on the environment, society and governance. The term 'sustainability reporting' replaces terms such as 'non-financial reporting' and 'environmental, social and economic (ESG) reporting.

As of November 28, 2022, the European Parliament adopted the CSRD Corporate Sustainability Reporting Directive (COM/2021/189). On January 26, 2024, the Directive was transposed into Romanian legislation by means of order no. 85/2024. The new regulations will have to be applied gradually between 2024 and 2028, as follows:

• January 1, 2024 -
for public interest companies with over 500 employees - the reports being issued in 2025;

• January 1, 2025 -
Large companies (which exceed 2 of the size criteria: over 250 employees and/or 40 million euros in turnover and/or 20 million euros in total assets) - the reports being issued in 2026;

• January 1, 2026 -
SMEs listed on the stock exchange - the reports being issued in 2027

• January 1, 2028 -
Non-EU companies with branches/subsidiaries in the EU - reports being issued in 2029

The sustainability report brings advantages to companies by improving corporate reputation, increasing customer confidence and increasing the degree of attractiveness for investors:

The benefits of a Sustainability Report

1. Performance Optimization -
A sustainability report highlights inefficient practices, providing opportunities to save resources and reduce operational costs.

2. Compliance Compliance -
Documenting compliance with environmental and social responsibility regulations helps manage legal and reputational risks. reducing the risk of sanctions and strengthening the credibility of the organization.

3. Improving image and reputation -
Publishing a transparent report strengthens the trust of stakeholders – including employees, customers and investors – by highlighting a commitment to responsible and sustainable practices.

4. Supporting innovation -
The reporting process can reveal opportunities for the development of innovative products, services and processes, adapted to market demands and sustainability trends.

5. Improved / expanded access to green finance -
Investors and financiers are more willing to support companies that value commitment to sustainability, increasing funding opportunities for those that demonstrate their commitment through a detailed report.

European Sustainability Reporting Standards (ESRS) Companies reporting under the CSRD will need to use the ESRS Standards developed by the European Financial Reporting Advisory Group (EFRAG), the technical body that provides assistance to the Commission in the field of sustainability reporting.

Audit of sustainability reports

The CSRD requires the company's statutory auditor, another auditor (at the Member State's option) or an independent assurance service provider (IASP) (at the Member State's option) to provide limited assurance on the sustainability information reported by a company. Member States should set equivalent requirements for other independent assurance service providers (IASPs) in terms of quality, independence and supervision in accordance with the Audit Directive. There is also the possibility of claiming reasonable insurance at a later stage.

Our Support

Audit of Sustainability Reports and Support given to clients in starting sustainability reporting

- The independent assurance report issued by the financial auditor on sustainability reporting provides additional assurances regarding the reported non-financial information.

- We advise clients to identify and accumulate information related to sustainability, manage environmental, social or governance risks, develop policies and establish goals and key performance indicators. We inform customers about the evolution of ESRS standards so that they can take timely action.

And for us, the practitioners, sustainability is a new field, and we make continuous efforts to prepare for the effective implementation of sustainability reporting. We focus on improving our own staff and creating partnerships with specialists, in order to provide efficient services.
Sustainability reporting and the audit of the sustainability report involve increasing the resilience of a business/activity to environmental challenges by identifying the risks and opportunities associated with sustainability, ensuring transparency in communication with interested parties and aligning with international standards in the field. These processes help build trust, optimize performance and create a solid foundation for long-term sustainable growth.