ESG

Phinnix Advisory

ESG at Phinnix Advisory

Phinnix Advisory promotes the integration of ESG principles into business strategies, considering sustainability and social responsibility as essential criteria in our partnerships. Our role is to support companies that want to align their operations with modern governance standards and market expectations regarding corporate responsibility.

What does ESG mean?

ESG (Environmental, Social, Governance) is an analytical framework used to evaluate non-financial criteria that influence investment decisions and the way a company operates:

E – Environment: management of natural resources, carbon emissions reduction, biodiversity impact, and sustainability policies.
S – Social: employee and community relations, human rights, diversity and inclusion, working conditions.
G – Governance: corporate administration, financial transparency, business ethics, and legal compliance.

European framework

The European Union has established several key regulations to embed sustainability into the modern economy:

Taxonomy Regulation (TR): defines which activities can be considered sustainable, offering investors clear criteria for project evaluation.
Sustainable Finance Disclosure Regulation (SFDR): requires financial institutions to integrate sustainability-related risks and criteria into their investment decisions.
Non-Financial Reporting Directive (NFRD): obliges large companies (over 500 employees) to report annually on ESG factors.

This has been reinforced by the recently adopted Corporate Sustainability Reporting Directive (CSRD), which extends reporting requirements to companies with over 250 employees as well as listed companies. CSRD introduces mandatory and detailed reporting standards, supporting the EU’s goal of achieving climate neutrality by 2050.

National framework

În România, obligațiile privind raportarea non-financiară sunt prevăzute de Ordinul 1938/2016 și Ordinul 3456/2018, emise de Ministerul Finanțelor, care transpun în legislația națională cerințele NFRD. Acestea se aplică societăților mari, cu peste 500 de angajați și praguri financiare ridicate (active > 20 mnEUR sau cifră de afaceri > 40 mnEUR). Raportările trebuie să includă detalii privind impactul asupra mediului, consumul de resurse și alte elemente ESG relevante.

Local initiatives

In April 2022, the Bucharest Stock Exchange released a dedicated ESG reporting guide, encouraging companies to adopt best practices and align with European requirements. At the same time, Romania is working on implementing the Sustainability Code, a reporting tool inspired by the German model, as well as the National Strategy for the Circular Economy, which aims to support the transition toward a sustainable and resource-efficient economic model.