ESG reporting in Romania: A new era of corporate sustainability

New ESG reporting requirements in Romania mark a significant step toward corporate transparency and sustainability

Companies in Romania are entering a transformative phase with the introduction of ESG (Environmental, Social, Governance) reporting requirements under Order of the Ministry of Finance no. 85/2024, which governs sustainability reporting (OMF 85/2024).

This regulatory shift, aligned with the EU’s Corporate Sustainability Reporting Directive (EU CSRD), introduces phased obligations across various business sectors, making ESG compliance a critical business consideration. Failure to adapt could result in lost investment opportunities, reputational damage and potential legal consequences.

This article will examine:

• key ESG reporting requirements under OMF 85/2024;
• phased reporting timelines and impacted entities; and
• implications for businesses and staying compliant.

1. New ESG reporting obligations under OMF 85/2024

OMF 85/2024 establishes a structured ESG reporting framework, aligning with the EU CSRD and requiring specific sustainability disclosures in the directors’ report.

These phased obligations are linked to company size, public interest status and employee thresholds.   Key changes introduced by OMF 85/2024 include the elimination of existing non-financial reporting requirements from 2024 onwards. Companies within the scopeof OMF 1802/2014 and OMF 2844/2016 are now required to include a number of sustainability disclosures in their directors’ reports.s.

1.1 Phased reporting timeline

1.1.1 Beginning 1 January 2024 (financial year 2024, reporting in 2025):

• Public Interest Entities with over 500 employees and meeting the large/medium entity criteria under OMF 1802/2014 or OMF 2844/2016 as of the balance sheet date.
• Public-Interest Entities that are parent companies of a large group (as per OMF 1802/2014 and OMF 2844/2016 criteria), with an average of over 500 employees on a consolidated basis during the financial year.

Public-Interest Entities are defined as follows:

i. National companies/enterprises, wholly or partially state-owned companies and government business enterprises (according to the accounting regulations approved by OMF 1802/2014); and

ii. Companies whose securities are admitted to trading on a regulated market, and legal entities referred to in the Order of the Minister of Finance No. 666/2015 on the application of the Accounting Regulations in line with International Financial Reporting Standards by certain state-owned entities (according to OMF 2844/2016).

1.1.2 Beginning 1 January 2025 (financial year 2025, reporting in 2026):

• Medium and large-sized entities (as defined in paragraph 9(4) of the accounting regulations approved by OMF 1802/2014, and paragraph 48³ (1) point 2 of the accounting regulations approved by OMF 2844/2016) that are not Public Interest Entities.
• Parent companies of large groups that are not Public Interest Entities.

1.1.3 Beginning 1 January 2026 (financial year 2026, reporting in 2027):

• Entities listed on regulated markets that do not meet the size criteria for sustainability reporting for 2024 and 2025 (as defined in paragraph 48³ (1) point 2 of the accounting regulations approved by OMF 2844/2016).

1.1.4 Beginning 1 January 2028 (financial year 2028, reporting in 2029):

Romanian branches or subsidiaries whose ultimate parent companies are governed by the laws of a third country, subject to specific size criteria laid down in OMF 1802/2014 and OMF 2844/2016.

1.2 Other key provisions enhancing ESG compliance

OMF 85/2024 introduces several essential measures to ensure comprehensive ESG reporting:

• Double Materiality: Companies must report on how their operations affect sustainability and how sustainability issues impact their business (the in and out principle).
• European Single Electronic Format (ESEF): Sustainability reports must be presented in a digital format compliant with EU standards (Article 3 of Commission Delegated Regulation (EU) 2019/915).
• Audit and Assurance: ESG reports require independent verification, strengthening credibility and investor confidence. The ESG report must be published alongside an assurance opinion issued by authorised persons or firms qualified to provide assurance on sustainability reporting under applicable law.

2. What is ESG reporting and why does it matter?

ESG reporting integrates environmental, social and governance factors into corporate disclosures, providing a broader perspective beyond financial performance.

Environmental metrics include a company’s approach to greenhouse gas emissions, resource use, global warming, energy consumption, pollution, biodiversity and more. Social factors assess employee relations, customer engagement and community impact, while governance focuses on ethical leadership and corporate integrity. Complying with ESG standards is not just a regulatory obligation but a strategic advantage..

Companies with strong ESG performance are more likely to attract investors and business partners, reduce operational risks and enhance their reputation. This makes ESG a key element of long-term business strategy, influencing financing costs, customer loyalty and competitive positioning.

3. How businesses can prepare

Conducting ESG due diligence is essential for understanding reporting obligations and mitigating risks.

Legal and consulting experts can assist in assessing whether companies fall within the scope of OMF 85/2024 and guide them in developing compliant ESG policies. Furthermore, companies with existing sustainability frameworks must evaluate their alignment with Romanian regulations, addressing any gaps to reduce compliance risks.

4. Conclusion

OMF 85/2024 is a crucial step towards embedding sustainability into Romania’s business landscape, promoting transparency and fostering investor confidence. However, full transposition of EU CSRD remains a challenge. Romanian businesses must embrace these changes, ensuring compliance and contributing to a more sustainable future. By taking proactive measures now, companies can turn ESG compliance from a regulatory burden into a strategic advantage, positioning themselves as leaders in the growing sustainability movement.