Romania’s economy is transforming fast. As European supply chains tighten around sustainability and transparency, small and medium-sized enterprises (SMEs) are being pushed to prove their environmental, social, and governance (ESG) performance. For many, ESG reporting feels like a burden — yet it is quickly becoming a business advantage.
Across Europe, the Corporate Sustainability Reporting Directive (CSRD) now requires companies to disclose detailed ESG data. Romania, as an EU member, has adopted these standards through national legislation, meaning even smaller businesses that supply to large enterprises will soon need to comply.
This article explains what ESG reporting is, how it affects Romanian SMEs, and what steps to take now to stay ahead.
Summary:
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Understand how EU ESG laws apply to Romanian companies.
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Learn practical steps to build a clear, credible ESG reporting process.
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Discover how early compliance can secure your future in shifting supply chains.
Introduction to ESG
ESG stands for Environmental, Social, and Governance — three pillars that measure how a company manages sustainability, transparency risks and responsibilities.
In Romania, embedding ESG principles means more than following new rules. It means running a business that reduces waste and carbon emissions, treats people fairly, and makes transparent decisions.
Strong ESG practices improve financial performance, reduce risk, and strengthen trust with investors and clients. Whether you operate a local manufacturing plant in Cluj, a logistics firm in Constanța, or a tech company in Bucharest, ESG is fast becoming part of everyday business reality.
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Environmental factors track your use of energy, materials, and carbon emissions.
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Social factors measure employee wellbeing, community engagement, and human rights.
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Governance evaluates transparency, ethics, and board oversight.
Companies that document these efforts through ESG reporting show measurable responsibility — which can directly influence contracts, credit terms, and investment opportunities.
Understanding ESG Reporting
ESG reporting is the process of disclosing information about a company’s sustainability practices, performance, and risks. It tells stakeholders — investors, regulators, and customers — how responsibly the business operates.
In Romania, ESG reporting aligns with the EU’s Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS). These frameworks standardize what data must be disclosed and ensure comparability across European companies.
Commonly used frameworks include:
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Global Reporting Initiative (GRI) — global standard for sustainability disclosures.
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Sustainability Accounting Standards Board (SASB) — industry-specific ESG metrics.
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Task Force on Climate-related Financial Disclosures (TCFD) — climate risk focus.
For SMEs, these may sound complex. But ESG reporting simply means recording and communicating what you already do — from energy use to employee safety. Over time, your ESG data becomes a roadmap for improvement.
ESG and the Shifting Supply Chains – A Survival Moment for SMEs
Global supply chains are being redrawn. Tariffs, conflicts, and climate regulations are forcing large corporations to rebuild networks around partners who can prove ESG compliance.
For Romanian SMEs, this is a critical moment. Long-standing contracts are under review. Multinational buyers now ask for carbon data, waste-management policies, and labor standards before renewing agreements.
Those who act now — documenting environmental performance and social responsibility — will earn trust and secure their position in new trade networks. Those who delay risk being cut off from key clients.
Adapting early brings opportunity:
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Access to new European markets prioritizing low-carbon suppliers.
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Preferential financing from ESG-focused banks and investors.
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Increased resilience against future regulatory changes.
ESG is no longer optional. It is the passport to tomorrow’s supply chains — the difference between being replaced and being relied upon.
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ESG Reporting Requirements
Under the CSRD, large Romanian companies and listed SMEs must disclose their ESG performance using the ESRS beginning in 2025. However, supply-chain pressure means even smaller suppliers will feel these expectations.
Key reporting elements include:
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Environmental metrics such as carbon emissions, waste, and energy use.
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Social data covering diversity, equality, and worker safety.
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Governance indicators like anti-corruption policies and executive compensation transparency.
The Sustainability Accounting Standards Board (SASB) and GRI frameworks help standardize disclosures. Romanian firms should begin aligning with at least one framework now to avoid costly catch-up later.
Failure to comply can lead to reputational damage and lost contracts — especially with European buyers subject to strict ESG due-diligence laws.
ESG Frameworks and Standards
ESG reporting frameworks exist to create consistency and comparability. In Romania, the most relevant are:
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GRI Standards — ideal for comprehensive sustainability reports.
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SASB Standards — focused on financial materiality and sector relevance.
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European Sustainability Reporting Standards (ESRS) — mandatory for EU-regulated companies.
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IFRS Sustainability Disclosure Standards (ISSB) — emerging global baseline for ESG data.
Using these frameworks ensures that disclosures are transparent and verifiable. Many Romanian SMEs use GRI for environmental and social reporting, while referencing SASB for industry-specific metrics.
Companies can also adopt ESG reporting software to simplify data collection, automate updates, and ensure data accuracy — especially when multiple facilities or suppliers are involved.
ESG Strategy and Disclosure
An ESG strategy must integrate directly into your business plan. It’s not just about reports; it’s about making sustainability measurable.
Steps to build a clear ESG strategy:
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Assess current performance. Identify strengths and high-risk areas.
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Set measurable goals. For example, reduce energy use by 10 % in two years.
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Engage stakeholders. Employees, clients, and local communities all shape outcomes.
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Disclose transparently. Publish annual sustainability reports with qualitative and quantitative data.
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Review regularly. Update goals as your company grows or regulations evolve.
Transparent disclosure builds trust with lenders and partners. It also improves investor confidence — especially in sectors like manufacturing and logistics where ESG risks are tangible.
Sustainability and Integrated Reporting
Sustainability reporting focuses on environmental and social performance. Integrated reporting merges that data with financial results to show how ESG affects long-term value.
Romanian companies increasingly combine both. For example, a factory might publish a sustainability report highlighting carbon reduction and community projects, alongside financial results showing reduced energy costs.
Key ESG metrics include:
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Greenhouse gas emissions (Scope 1–3).
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Water and energy consumption.
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Human rights and labor conditions.
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Governance structure and executive oversight.
Frameworks like GRI and ESRS help ensure comparability and transparency. Integrated reporting demonstrates that sustainability isn’t a side effort — it’s central to profitability.
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Regulatory Compliance and ESG
Compliance in Romania mirrors EU regulation. The Ministry of Environment, Water, and Forests, together with the Romanian Financial Supervisory Authority (ASF), monitor ESG disclosures for listed and large companies.
Even if your SME isn’t yet legally required to report, your clients may be. This indirect compliance chain means your ESG performance directly affects their ability to meet CSRD rules.
To stay compliant:
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Monitor updates from the European Commission and Romanian government portals.
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Use recognized frameworks (GRI, SASB, ESRS).
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Document policies on environmental stewardship, human rights, and governance practices.
Strong regulatory compliance protects your company’s reputation and prepares you for future ESG audits.
Challenges in ESG Reporting
Romanian SMEs face several obstacles in ESG implementation:
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Resource limits. Many lack dedicated sustainability teams.
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Data accuracy. Collecting reliable ESG data from suppliers can be difficult.
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Evolving regulations. Frequent EU updates require constant monitoring.
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Stakeholder engagement. Building two-way communication with staff and partners takes time.
To overcome these, companies can adopt ESG reporting software, train key employees, and begin with a phased approach — prioritizing the most material ESG factors first.
ESG Reporting Across Regions
Romanian exporters must align with the ESG expectations of every market they serve. For example:
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Germany requires strict supplier audits under its Supply Chain Act.
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France enforces strong corporate duty-of-vigilance laws.
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The Netherlands emphasizes carbon transparency in procurement.
Unified frameworks such as GRI and IFRS help companies maintain consistency. Cross-border alignment also makes your ESG disclosures credible to investors across the EU and beyond.
Staying current on regional differences ensures your sustainability report meets international standards — boosting competitiveness and access to funding.
Building an ESG Roadmap
An ESG roadmap turns sustainability from theory into a step-by-step plan.
How to build it:
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Define clear goals for emissions, waste reduction, and employee wellbeing.
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Assign responsibilities within your team.
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Set timelines — quarterly milestones for achievable progress.
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Integrate ESG into operations — from procurement to HR.
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Review annually and publish results.
Your roadmap should align with your business strategy and stakeholder expectations. Regular reviews ensure continuous improvement and credibility during audits.
Collecting and Reporting ESG Data
Reliable data is the backbone of effective ESG reporting.
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Identify key data sources — HR systems, energy bills, supplier questionnaires.
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Ensure accuracy through internal controls and third-party validation.
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Use ESG reporting software to streamline data management.
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Report both qualitative and quantitative information to show context and progress.
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Follow recognized standards (GRI, SASB, ESRS) for consistency.
Good ESG data management not only simplifies compliance but also reveals operational efficiencies, from lower utility bills to improved employee retention.
Being Prepared for ESG Reporting
Preparation saves time, money, and stress. Begin by understanding which ESG regulations apply to your business type and size.
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Assess readiness. What ESG data do you already collect?
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Fill gaps. Draft simple policies where none exist — energy, diversity, or ethics.
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Automate collection. Use spreadsheets or affordable ESG tools.
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Engage stakeholders. Explain why ESG matters to your team.
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Review annually. Continuous improvement matters more than perfection.
Being proactive demonstrates leadership and builds resilience.
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Conclusion
For Romanian SMEs, ESG is not just another acronym. It’s a competitive strategy for surviving and thriving in Europe’s evolving marketplace. By understanding ESG frameworks, complying with reporting requirements, and documenting responsible practices, your company can gain trust, attract investors, and secure long-term growth.
Sustainability is no longer a distant goal — it’s today’s business reality. Act now, report clearly, and lead confidently.
FAQs
1. What is ESG reporting?
ESG reporting is the disclosure of a company’s environmental, social, and governance data to stakeholders, showing accountability and sustainability performance.
2. Is ESG reporting mandatory in Romania?
Under EU law, large and listed Romanian companies must report from 2025 under the CSRD and ESRS. SMEs may follow voluntarily or when required by supply-chain partners.
3. Which ESG frameworks should Romanian companies use?
The Global Reporting Initiative (GRI), SASB, and European Sustainability Reporting Standards (ESRS) are most relevant in Romania.
4. How does ESG affect financial performance?
Strong ESG performance reduces risk, attracts investors, and can lower capital costs through improved creditworthiness.
5. What data should SMEs collect for ESG reporting?
Energy consumption, carbon emissions, diversity metrics, workplace safety records, and governance policies are core data points.
6. How often should ESG reports be published?
Typically once a year, but quarterly internal updates help track progress and maintain data accuracy.
7. Are Romanian SMEs legally required to follow CSRD?
Not yet, but indirect compliance is necessary if they supply to larger companies that must report.
8. What are the main ESG risks for Romanian businesses?
Energy inefficiency, labor-rights compliance, and limited governance documentation are common challenges.
9. How can ESG reporting improve reputation?
Transparent ESG disclosure signals responsibility, builds stakeholder trust, and differentiates you from competitors.
10. What is the easiest way to start ESG reporting?
Use a structured ESG Reporting Kit to draft core policies, collect data, and align with recognized frameworks quickly.
About ESG The Score
ESG The Score makes it easy for small and medium businesses to stay ahead of ESG reporting requirements and growing supply-chain audit pressures. We understand that SMEs are often downstream from larger entities and face increasing demands for transparency and compliance.
Our solutions are designed to be quick, smart, and affordable, giving you the right tools without heavy consulting fees or complex software. From ESG Reporting Kits to Core Policy Bundles and IT Compliance Frameworks, we simplify sustainability and make it actionable.
With ESG The Score, companies can take control of their reporting, build trust with partners, and stay competitive in their industries.
You may also want to review our ESG Reporting Toolkit, Supply Chain Audit, Core Policy Bundle and Stakeholder Engagement Toolkit for Canada, United States, India, United Kingdom, Australia, Brazil, Singapore, Malaysia, Germany, France, Philippines, South Africa, Ireland, UAE, Netherlands, Hong Kong, Romania, Czechia, Vietnam and Turkiye.