The outlook for economic development is constantly evolving, with a stronger commitment to society and nature being demonstrated by many businesses. Companies are increasingly integrating the components of sustainability into their activity, paying more attention to the creation of sustainable systems that are based on the protection of nature, the well-being of society, fighting inequality, stimulating lifelong learning, etc. Many international forums have outlined taking responsibility for the environment and society as the main pillar of the economic future.
One of the main steps taken during the last year in Romania has been alignment to the new sustainability reporting requirements set by the Corporate Sustainability Reporting Directive (CSRD). Both the Ministry of Finance and the National Bank of Romania have issued orders for the implementation of CSRD. Parliament is also close to deciding on a specific implementation of CSRD for listed companies as part of a draft to amend Law no. 24/2017.
At the same time, Romania has managed to update its National Energy and Climate Plan and sent it to the European Commission in October.
The business environment is involved in the sustainable development of the Romanian economy through active cooperation with public authorities. Identifying legislative gaps and addressing them is a priority in establishing solid foundations that allow the acceleration of efforts to develop a well-performing economy based on principles of sustainability and transparency.
Romania’s National Sustainable Development Strategy 2030 and the National Action Plan
The 2030 Agenda for sustainable development adopted by all Member States of the United Nations (UN) in 2015 provides a common plan of action for peace and prosperity, people, and the planet. This is structured around 17 sustainable development goals (SDGs) that cover areas such as poverty, health and well-being, quality education, gender equality, inequality and gaps, food security, sustainable consumption and production, economic growth, employment, infrastructure, climate change, ending pollution and loss of biodiversity, sustainable management of natural resources, access to justice and responsible institutions.
Romania supports the UN goals and is working closely with other European Union members states as well as the wider international community to achieve them. The goals form part of Romania’s National Sustainable Development Strategy 2030 (SNDDR 2030), which presents the local strategic vision for the creation of a sustainable society.
SNDDR 2030 sets 95 objectives related to the 17 SDGs and acts as a supporting framework for the other national strategies and sectoral policies related to the areas it covers. It is being developed and implemented by the line ministries.
In order to operationalise SNDDR 2030, the Department for Sustainable Development was established, which operates within the working apparatus of the Government. Subordinated to the Prime Minister, this department has the role of coordinating the national efforts to implement the SDGs.
The FIC appreciates the efforts made so far to establish an effective strategic and institutional framework and supports the application of an integrated and multidimensional approach in the implementation of the actions provided for in SNDDR 2030 and in the National Action Plan for the implementation of SNDDR.
However, the latest UN Sustainability Report (2024) reflects little progress by Romania over the last 10 years in terms of meeting the set goals.
Out of the 17 Sustainable Development Goals (SDGs), Romania has made progress in only one area—No Poverty—where the status is either on track or maintaining SDG achievement. For 9 SDGs, progress was moderate but insufficient to meet the targets, while 4 SDGs showed stagnation or growth at less than 50% of the required rate. What is particularly worrying is that, based on the indicators monitored for SDG 4, Quality Education, this latest report indicates that significant challenges remain and that Romania’s performance has declined. The Report recommends that Romania should ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.
Considering the current economic and political context, for the successful implementation of the measures necessary to build a resilient society, support economic growth, maintain natural capital and even support the restoration of ecosystems, it is absolutely essential for the general level of education of the population to be increased. Consequently, the FIC considers that projects in the educational field must be approached as a priority, in a consistent and coherent manner, and the education system must be modernised as soon as possible.
Furthermore, a better connection between the education system and labour market requirements is necessary. This can be achieved through continuous training of the teaching staff and by integrating into the educational programs the subjects that are necessary for the exercise of relevant professions in the new European context of economic growth decoupled from the consumption of natural resources.
The National Circular Economy Strategy
On 21 September 2022, the Romanian Government adopted the National Circular Economy Strategy, developed under the coordination of the Department for Sustainable Development. Its objective is to support Romania's transition towards a circular economic model, in accordance with the EU’s Circular Economy Action Plan.
The main lines of action provided for in this document involve:
Reducing the consumption of virgin raw materials through more efficient extraction of raw materials and through recycling and recovery activities.
Reducing the consumption of consumer goods by extending the life of products.
Reducing the environmental impact of production activities.
Reducing the environmental impact of waste and wastewater management and disposal activities.
Improving the coherence of policies and governance, communication and cooperation between local, regional and national authorities.
This strategy provides a macroeconomic vision for 14 Romanian economic sectors and their first evaluation in terms of the potential for circularity. Thus, 7 sectors with a high potential for circularity were identified:
Agriculture and silviculture.
The car manufacturing industry.
Construction.
Consumer goods, such as food and beverages.
Packaging (glass, paper, plastic materials, etc.).
Textiles.
Electrical and electronic equipment.
The FIC considers that the Action Plan for the implementation of the National Circular Economy Strategy is necessary, and provides an adequate framework for cooperation between the public authorities and the relevant stakeholders, which should allow the achievement of more ambitious specific objectives.
Romania has made significant strides in supporting the circular economy by implementing the Deposit Return System (DRS). This initiative encourages recycling and reduces waste by offering a financial incentive for consumers to return used beverage containers. Through this system, individuals are reimbursed for returning their bottles and cans to designated collection points, ensuring that these containers are properly recycled or reused. By promoting recycling behaviours and minimising waste, the Deposit Return System plays a key role in Romania’s transition to a circular economy, aligning with national objectives for sustainability and resource efficiency.
The FIC considers that encouraging research and innovation is crucial for fostering a circular economy, particularly through the development of advanced materials and eco-design solutions that enhance recyclability and product longevity. Additionally, enhancing digitalisation and data sharing can play a significant role in achieving circularity by the implementation of digital product passports to track resource use and recyclability across supply chains. Financial incentives for circular business models, such as tax reductions, subsidies, or grants, should be introduced to encourage businesses to integrate sustainable practices. Public awareness and education also need to be emphasised by incorporating sustainability and circular economy concepts into national education curricula, ensuring a long-term shift toward responsible consumption and production.
Furthermore, infrastructure development is essential for enhancing waste management and recycling facilities to accommodate the growing demand for circular practices. Strengthening Extended Producer Responsibility (EPR) policies will hold producers accountable for the entire lifecycle of their products, including end-of-life collection and recycling. Green public procurement should be mandated, ensuring that public sector purchases prioritise products and services that comply with circular economy principles. These strategic actions collectively contribute to building a more sustainable economic model that minimises waste and maximises resource efficiency.
The circular economy entails a regenerative model, so it is fundamental that synergies between the economic sectors should be identified and strategically addressed.
A permanent dialogue is needed between public authorities and the business environment in order to identify the skills and competences required for the relevant occupations in the context of the transition to a new model of economic development and their integration into the educational process as soon as possible, including in defining learning programmes for the teaching staff.
An increase in financing for the educational system should be made a priority in areas where the current level of financing is insufficient to meet needs (e.g. pre-school education or remedial education).
Support should be given for the development of dual training poles, which would have an important role, both in reducing geographical inequalities, but also in terms of decreasing the school dropout rate and potentially mitigating the impact of demographic decline on the workforce.
Greater attention should be given to professional reconversion programmes, so that the energy transition and the adoption of the circular economy principles balance the potential reduction in demand for labour among greenhouse gas emissions-intensive activities and those involving a high consumption of resources from primary sources. This can be achieved by educating and training workers about job opportunities in these newer sectors, such as renewable energy.
The decision-making process on the use of available European funds for the modernisation of the energy sector should be accelerated and should be harmonised in relation to the various strategic documents at national level (for example, the National Recovery and Resilience Plan).
Targeted financial incentives or tax benefits should be created for companies investing in green technologies, renewable energy, and resource-efficient processes. These measures would support businesses in the adoption of sustainable practices while reducing their environmental footprint.
The adoption of circular business models should be promoted across all sectors by the provision of guidance and frameworks to businesses on how to integrate circularity into their operations. This can include promoting product-as-a-service models, increasing product lifespan, and fostering waste reduction practices.
At present, there is a high level of interest in investments in the development of renewable energy production capacities. Thus, it is imperative to have a high level of predictability on legislative developments and improvement of regulatory measures that have an influence on the business environment.
In the current context, for a real transition with beneficial effects both in terms of reducing the level of carbon emissions, and for the development of a well-performing economy in terms of the use of resources, the development of innovative solutions and technologies needs to be stimulated. Taking into account that, at present, there is no unitary approach by the environmental authorities to the interpretation of legislative provisions on exemptions in terms of obtaining the environmental regulatory documents for the development and testing of new methods or products, the FIC considers that it is important for a new legislative initiative to be developed to clarify these situations. This will reduce the excessive bureaucratic procedures that slow down the pace of development and implementation of these innovative technologies.
To achieve efficient allocation of funds from public sources, we consider that it would be appropriate to impose conditions on financed projects relating to the monitoring of the degree of circularity on the basis of a robust framework, which takes into account a relevant set of key performance indicators.
An institutional framework should be developed for the coordination of public and private investments in order to amplify the effects of economic growth and development in Romania.
The initiative of the Department for Sustainable Development (DSD), within the Romanian Government, to launch, through the Code of Sustainability, a platform that facilitates compliance by organisations with reporting obligations and, at the same time, access of interested players to such information, could have been a step in the right direction. Unfortunately, due to the lack of alignment with the new legislation and reporting standards at EU level, use of the platform was not widely adopted. Only two companies uploaded their sustainability reports in the platform.
Now, the DSD is working at a new platform, which should meet the new legislative requirements. As stakeholders, including from the business community, were involved in discussions before the final design of the platform we see this as a positive signal from the Government.
If the platform is launched according to the provisional timetable (around mid-2025), it could also be an important step in implementing the European Single Access Point at national level (ESAP).
Corporate Sustainability Reporting Directive (CSRD) and local implementation
On 28 November 2022, the Council of the European Union issued its final approval of the Corporate Sustainability Reporting Directive (CSRD), endorsing the position of the European Parliament. The new rules were required to be implemented by the Member States within 18 months of the entry into force of the Directive.
The CSRD also applies to insurance companies and credit institutions, regardless of their legal form.
Currently, based on the transposition of the provisions of Directive 2014/95/EU amending Directive 2013/34/EU on disclosure of non-financial and diversity information by certain large undertakings and groups (NFRD), only a relatively small number of undertakings have started to publish non-financial/sustainability reports/statements. Further adoption depends on the final form of the first Omnibus regulation of the EU which aims to reduce / simplify the CSRD, DDD and Taxonomy requirements for companies.
The Ministry of Finance, through Order no. 85/2024, and the National Bank of Romania, through Order no. 1/2024, have adopted the EU legislation. The Financial Supervisory Authority and the Ministry of Finance have also prepared a draft law amending Law no. 24/2017 to implement CSRD for listed companies.
Compared to the general framework established by CSRD, in Romania implementation will be faster, with entities meeting at least two of the following three criteria having to begin publication of sustainability data from January 2026:
Assets of at least 25 mil. Lei.
Net turnover of at least 50 mil. Lei.
Average number of employees of at least 50.
Beyond the significant increase in the number of reporting enterprises, the application of the CSRD will also lead to an increase in the quality of the reported information as a result of the introduction of reporting standards, as well as the requirement for the reported information to be to audited and verified.
Compliance with the CSRD provisions will require a considerable effort by companies, especially those that have not been required to report up to now. At the same time, in turn, the authorities will have to make their own efforts to ensure that they have the necessary resources and the necessary level of competence to verify compliance.
Public authorities should take into consideration a unified regulation for the transposition of EU legislation, including the CSRD, considering that there are currently several regulations for specific sectors – non-financial companies, non-listed companies, financial institutions and listed companies. This would help avoid current legislative parallelisms that can create confusion, difficulty in implementation and which require unnecessary efforts by businesses.
The authorities responsible for implementing CSRD should be given the necessary resources.
A sanctions regime should be implemented, as well as measures to encourage compliance.
Information campaigns should be organised and relevant materials disseminated (as the BVB did with its ESG Reporting Guidelines) among companies that have reporting requirements according to the CSRD, but also among relevant staff within public authorities.
Discussion with all relevant stakeholders should begin, in order to prepare the timely implementation of legislation for the implementation of the Directive on corporate sustainability due diligence.
Based on the example of the Bucharest Stock Exchange (BSE)’s ESG Reporting Guidelines, specific guidelines should be developed for certain relevant categories, such as auditors and verifiers or the staff of public authorities.
A national education and training program should be developed on sustainability reporting standards and frameworks. This would be available to those who manage and report data and issues related to sustainable development in the companies that fall under the mandatory reporting regulations.
New Code of Corporate Governance of the Bucharest Stock Exchange (“BSE”)
On 9 December 2024, the BSE published the revised Corporate Governance Code for listed companies (the “Code”), developed in cooperation with the European Bank for Reconstruction and Development. The updated Code, aligned with recent regulatory changes, global standards, and stakeholder priorities, aims to enhance corporate and market resilience, foster innovation, and promote sustainable practices.
The Code addresses 5 main aspects of corporate governance, i.e.: (a) Governing Bodies; (b) Risk Management and Internal Control; (c) Performance, Motivation and Reward; (d) Disclosure and Investor Relations and (e) Sustainability and Stakeholders. Each of these sections detail (a) why the specific matter is important for effective governance; (b) the objectives companies should aim to achieve and (c) the specific practices that, if followed, will enable companies to meet the objectives.
The Code follows the “comply or explain approach”, allowing issuers to decide which practices to adopt or to explain why they do not comply with a specific practice included in the Code. A “comply or explain” statement must be included as part of the issuers’ annual report.
The Code applies to all companies listed on the main BSE market, with compliance reporting beginning for the 2025 financial year.
Aspects related to the board of directors/ management
1. Transposition of the Women on Boards Directive
On 27 December 2022, the Women on Boards Directive entered into force, establishing certain requirements in relation to gender balance in the management bodies of companies listed on regulated markets in EU Member States.
A legislative proposal to amend Law 24/2017 ("Proposal to amend Law 24/2017"), which includes provisions for the transposition of this Directive, it was promulgated in March 2025 by Decree No. 101/2025 and became Law No. 11/2025. It includes effective measures aimed at accelerating progress towards gender balance.
2. Corporate governance for state-owned companies
The corporate governance principles for state-owned enterprises have been revised to align with the standards set out in the Principles of Corporate Governance of the Organisation for Economic Co-operation and Development (“OECD”), reflecting Romania's commitment to its OECD accession process.
3. Share awards and options
Romanian legislation lacks a comprehensive framework regulating share awards and stock option plans. The primary legal basis is provided by the Fiscal Code, which sets out the main requirements for stock option plans (“SOPs”) to qualify for tax incentives. From a corporate law perspective, the Company Law (Law 31/1990) includes only one provision stating that treasury shares acquired by a joint-stock company for allocation to its employees must be transferred within 12 months of the date of acquisition.
Despite this limited framework, there is a growing interest in fostering management loyalty and enhancing performance, particularly through long-term incentive plans involving the granting or allocation of shares in the (parent) company. These plans can take various forms, such as (virtual) stock option plans or restricted stock units (generically called SOPs).
SOPs are increasingly being introduced by both listed and non-listed companies, with minor variations in the legal mechanisms employed depending on the company type (e.g., joint-stock companies versus limited liability companies).
In order to raise the awareness of managers about ESG requirements at governance level, greater involvement by professional associations of company directors, which would give practical assistance in the implementation of ESG policies or more sector-based initiatives, would be welcome. We also encourage inviting ESG experts periodically to meetings of management bodies with an advisory role.
While the Fiscal Code has long offered the possibility of tax advantages for SOPs, clarifications are still needed for the following aspects:
Clarification is required on the extent to which different types of SOPs, such as plans involving free/restricted shares or virtual shares (“phantom shares”), fall under the definition of SOPs as per the Fiscal Code and benefit from tax incentives.
For listed companies, clarity is needed as to the extent to which the Central Depository can settle SOPs in situations in which a plan is operated at the level of a group of companies, e.g. the settlement of a plan consisting of the purchase, by a subsidiary, of the shares of the parent company (issuer), followed by their allocation to the subsidiary’s employees.
It should also be determined whether the settlement methods available for joint-stock companies (e.g., share redemption followed by allocation to employees) can be equally applicable to limited liability companies in the case of SOPs.
Providing clarity on the aspects outlined above would be likely to encourage the broader adoption of SOPs.
The field of investor rights and protection continues to evolve, with a clear focus on enhancing safeguards, particularly for those active in the capital market. This shift has been significantly influenced by EU legislation, driven by the lessons learned from recent financial crises across Europe.
We have identified the following points of special interest:
Listing Act
On 8 October 2024, the Council of the European Union adopted the Listing Act, a legislative package aimed at enhancing the attractiveness and accessibility of EU capital markets for all companies in EU Member States. The legislative package includes amendments to the Prospectus Regulation, the Market Abuse Regulation (MAR) and the Markets in Financial Instruments (MiFIR) regulation.
The amendments to the Prospectus Regulation were necessary to reduce complexity, high costs, and the lengthy approval process for prospectuses related to public securities offerings. The previous regulation imposed burdensome and costly requirements on companies, including small and medium-sized enterprises (“SMEs”), seeking access to public markets through initial public offerings (“IPOs”) or secondary offerings.
Additionally, disparities among EU Member States in relation to exemption thresholds and documentation requirements led to fragmentation and a lack of clarity for issuers and investors. The new EU legislation standardises exemption thresholds, reduces bureaucracy, and simplifies documentation requirements, enhancing the attractiveness of EU public markets.
Six years after the MAR Regulation came into force, input from stakeholders – obtained via public consultations and discussions with expert groups - has highlighted that certain provisions create an undue burden on issuers. To address these concerns, it was necessary to provide clearer legal guidance, reduce excessive requirements, and make EU capital markets more appealing, all while upholding strong standards for investor protection and market integrity.
The revised MAR Regulation will enter into force on 5 June 2026, except for those provisions related to the voluntary delay of the publication of inside information by an issuer that is a credit institution/ financial institution/ parent company of such an institution, which entered into force on 4 December 2024.
Facilitation of the exercise of investor rights
Although the legal framework provided by SRD II – transposed by Law no. 24/2017 – established an unprecedented, wide range of rights for capital market investors, we still do not see large-scale exercising, especially among retail investors, of many of these rights. Consequently, there is a risk that, in the absence of “activist investors”, a generalised passivity of investors will perpetuate. In this context, it should be remembered that the Shareholder Rights Directive (SRD) II introduced impact rights for shareholders.
In June 2024, Government Emergency Ordinance (GEO) 71/2024 amending Law 24/2017 came into effect. This Ordinance resulted from extensive and transparent consultations with capital market stakeholders, aiming to enhance investment security and align with the strategic objectives for capital market development in the context of OECD accession.
A significant amendment empowers the Financial Supervisory Authority (ASF) to restrict access to websites operated by unauthorised entities that offer investment services through deceptive practices, manipulative techniques, or aggressive advertising. This measure is designed to protect investors from potential fraud and ensure a safer investment environment.
Further amendments to Law 24/2017 are anticipated in the first half of 2025 (through the Proposal amending Law 24/2017, as mentioned above), focusing on the continued development of Romania's capital markets.
New corporate governance rules: Issuers are strongly encouraged to take a proactive approach in preparing for the implementation of the updated corporate governance framework. This involves ensuring compliance with the provisions of the New Code of Corporate Governance, the Women on Boards Directive, the CSRD Directive, the revised Prospectus/ MAR Regulations, as well as with the Proposal amending Law 24/2017. Updating internal governance procedures to align with these changes is essential. Furthermore, close cooperation with the BSE and ASF is highly recommended to facilitate a smooth transition to the new regulatory requirements.
Clarification of the scope of the SOP provisions: There is a need for clearer guidelines on the extent to which various remuneration mechanisms fall under the definition of a "stock option plan" as outlined in the Fiscal Code. This ambiguity is particularly significant for plans that deviate from traditional stock options, such as those involving free shares, restricted share units (RSUs), or virtual shares like "phantom shares". To address this, the relevant Romanian authorities (ANAF, the Romanian Government, the Central Depository, the BSE or ASF) should provide clarifications in relation to the approval, taxation, and operational mechanisms of these plans. Given their increasing prevalence across both listed and unlisted companies, such guidance would support the consistent application and smooth functioning of these incentive schemes in the market.
Exercise of shareholder rights and fulfilment of obligations: To enhance awareness and ensure the effective exercise of shareholder rights, including those further expanded under the revised EU and national legislation, a comprehensive public awareness campaign led by regulatory authorities, particularly ASF, is essential. This initiative should aim to educate investors on their rights and responsibilities, fostering greater engagement and participation in corporate governance processes across the stock market.
Updating shareholder information: The requirement for intermediaries to submit shareholder identification information – correlated with the corresponding requirement for processing by the issuer – should be strengthened and closely monitored by the regulatory authorities, as well as by the Central Depository, considering that there are many cases where the identification data of the shareholders is not updated.
Public impact consultation: To ensure the effective implementation by issuers of the recently transposed EU Directives, as well as the revised versions of EU/ national legislation, we suggest the organisation of public consultations aimed at supporting issuers in adapting their internal processes and systems to meet these new requirements. These consultations should also serve as a platform to identify and address any implementation challenges or obstacles that issuers may face, facilitating the remediation of difficulties and promoting a seamless transition to the new regulatory framework. By fostering a collaborative dialogue, stakeholders can ensure both compliance and the achievement of the intended objectives of the directives.
Encouraging unlisted companies to apply sustainable corporate governance practices: While the above recommendations primarily target listed companies and participants in the capital market, it is equally important for unlisted companies - particularly large private entities or state-owned enterprises – to be encouraged to adopt sustainable corporate governance practices. These entities play a significant role in the economic landscape, and their alignment with the new regulatory standards would contribute to broader market integrity and transparency. Initiatives to promote such practices could be led by state authorities and ministries could be tasked with fostering sustainability in the business environment, particularly in relation to SMEs, ensuring that the principles of good governance extend beyond the listed sector.
The beneficial role of non-governmental organisations (NGOs) in a society is clear. In Romania, projects run by many of these organisations working in the fields of health, education, social services or the environment, for example, have had a significant impact and have supplemented or supported state action.
Private companies in Romania recognise, in their turn, the essential role that NGOs play in society and some have chosen to redirect sponsorship money to support projects carried out by such non-governmental organisations in various fields of activity.
We believe that the state, through the regulatory framework it creates, should stimulate the existence of effective NGOs and provide stability and predictability, while at the same time giving potential sponsors the necessary safeguards to ensure that the funds they direct to such organisations are used transparently and fairly.
In order to stimulate partnership between private companies and NGOs, we believe that there should be an improvement in the level of transparency in relation to the use of the funds that these organisations receive from various sources, by the introduction, for example, of mandatory periodic audits, conducted by specialised entities, which can be accessed by sponsors.
At the same time, we consider that the current tax treatment applicable to sponsorships should be maintained, using the tax credit approach, which we believe is likely to facilitate the more vigorous and efficient implementation of projects developed by the non-governmental sector.