Wiser business for a more benevolent future
Sustainability. Responsibility. Diversity. These are the determinants of today’s business. ESG is not just crossing an item on the list of things to do, but a desire to leave a mark and make a significant difference in the world and your business. Environmental sustainability and socially responsible behaviour are the key to a better future for all of us, so implementing ESG operations becomes almost imperative for companies.
Due to cooperating with the rest of the world, Serbian companies will have to apply ESG rules and do ESG reporting. What does that exactly mean? This is a qualitative disclosure related to the impact that a given organization has on the natural environment (environmental), social environment (social) and management (governance), but also quantitative measurements and comparison of the company’s achieved performance relative to the previously defined ESG risks, strategies and opportunities. If you need expert advice, guidance and help from professionals, don’t worry, FinExperts are here for you.
The ESG report contains 3 basic elements:
• The environmental element includes a wide range of topics such as environmental pollution, climate change, CO2 emissions, use of natural resources, opportunities to use and invest in clean technology, renewable and green energy, waste management including electronic waste, etc.
• The social element concerns issues related to human resources, work health and safety, product safety and quality, privacy and data protection, opportunities for access to financing and health care, responsible investing, socially responsible behaviour, etc.
• The governance element refers to business ethics and culture, tax and accounting transparency, executives’ salaries, ownership structure, board diversity in terms of age, gender, professional experience, education and anti-monopoly practices, corruption and bribery, etc.
Obligations of legal entities that have to submit non-financial reports
Large legal entities, such as companies of public interest, are obligated to submit non-financial reports. It is important to note that they are required to submit a non-financial report that includes certain ESG disclosures in their Annual Business Report. This includes information important for understanding business activities related to environmental protection, adhering to human rights, their fight against corruption and issues related to bribery, as well as social and personnel issues.
In November 2022, an ESG regulatory conference was held in Belgrade under the title “Taming the Dragon: Implementation of ESG – Demystification of Risk” at which it was said that relevant ESG rules would start to be implemented in early 2023. ESG compliance regulations are becoming increasingly stricter and Serbian companies will need to be ready to meet the upcoming reporting requirements. In this sense, ESG is no longer just a nice-to-have, but a required business strategy for all corporations shaping a sustainable future.
Due to cooperating with the rest of the world, Serbian companies will have to apply ESG rules and do ESG reporting.