ESG Reporting in Romania – A Challenge of Ensuring a Greener Financial System

Purpose: ESG non-financial reporting provides an integrated view of a company’s performance, considering its long-term impact on society, the environment, and governance. The research aims to explore 20 of Romania’s most publicly listed companies (known as BET 20) on their journey to adopting ESG regulation. Methodology: Analysing the BET 20 annual company report for 2022, which was published on their websites, as well as the corporate strategy, the sustainable strategy, and policies related to remuneration, corporate governance, and the environment. Findings: ESG reporting in Romania is still in its early phase. Most struggle to provide systemic coherence and transparency without a specific structure of non-financial reporting. Furthermore, while external audits are obligatory for financial statements, this requirement does not extend to non-financial statements. As stated in the 2022 Romania Report from the Global ESG Monitor, the study concludes that companies in Romania’s BET 20 index rank at the bottom in the European Union regarding monitoring and achieving the 17 sustainable development goals. Limitations: The potential need for a more comprehensive representation of the broader corporate landscape and the diversity of ESG practices within smaller or unlisted entities, thus potentially limiting the generalisability of the research findings. Future research: The nuanced ESG reporting practices of a broader spectrum of Romanian companies, encompassing both listed and non-listed entities, to provide a more holistic understanding of the varied approaches and challenges across the corporate landscape.