Bulgaria is late in adopting the European ESG regulations

Raya Lecheva

Bulgaria is among the countries that have not yet officially announced whether they have started active work on adopting the new European regulations - something for which our country has 18 months after the adoption of the texts in the EU. This was announced by Hilde Blom from Accountancy Europe at a conference of the Institute of Certified Expert Accountants in Bulgaria (ICEAB) and the International Association of Certified Certified Accountants (ACCA).

Last week, by order of the Minister of Finance, a working group was created to prepare a bill to amend the Accounting Act to reflect the implementation of EU ESG standards, commented Milena Raykova, Deputy Minister of Finance. These changes will lead to changes in the Law on Public Offering of Securities and in the Law on Independent Financial Audit, and it is expected that the first texts of this bill will be ready by mid-November.

ESG policies have gained more and more popularity in recent years, and in 2025 the first ESG reports are to be made (respectively for 2024) against the new regulations currently being discussed at the European level and yet to be transferred to Bulgaria. The topic of ESG policy reporting, however, is still poorly addressed was one of the conclusions of the conference. The implementation of ESG policies in practice, as well as the collection and processing of the data afterwards, will require the efforts of all business units, not only the accounting departments of companies, as it was believed until now. That's why businesses and regulators need to start preparing now for the expanded reporting requirements to avoid disruption for businesses.

Although relatively few companies from Bulgaria fall under the reporting regulation at the moment (estimated around 500-600 companies), the conference participants discussed how many other companies would be really affected in their business because of the supply chain and the requirements that large companies would impose. One of the conclusions made during the conference, it was precisely in this direction - that regardless of the person's position in the company and regardless of its size, businesses should show greater interest and familiarize themselves with the upcoming changes in order to be maximally prepared for them.

One of the main conclusions around which the specialists united is also that ESG policies and their follow-up would attract young talents to the auditing profession. This is due both to the fact that the younger generation is much more likely to recognize and seek out green policies, and to the dynamism and expertise that ESG reports require – something that is a major motivator for younger generations.

A major topic was also the future assurance commitments regarding the information that will be part of the management report of the management of each entity applying these requirements. Panelists shared their concerns regarding and providing certainty on the forecast information that companies must report.

"At ACCA, we believe that the accountancy profession, with its unique understanding of business and its ethical core, will play a critical role in guiding their clients and in collaborating with other professions in making the right ethical and sustainable decisions, as well as providing strategic vision for a better future. I am very glad that ICEAB is partnering with us to reinforce this message, help raise awareness among professionals of what the future holds and ultimately attract the younger generation into the profession in the context of increased sustainability regulation at EU level, which will provide opportunities for our profession," said Andrea Stanciu, Director for Southern Europe at ACCA.

"ESG reporting is one of the main topics that excite the auditing community in recent years, and that is why I deeply believe in the success of the jointly organized conference with ACCA, because the effects of mutual synergy between two or more institutions always exceed preliminary expectations," shared Boyko Kostov , Chairman of ICEAB.

"High expertise and unquestioning compliance with ethical norms in our profession are a guarantee for the correct progress of the changes that are generally ahead for business in the coming years of the introduction of sustainable development reporting standards. I am happy that up until now, together with the Commission for Public Supervision of Registered Auditors (CPSRA), we have carried out significant preparation of changes in the regulatory framework and we have the readiness and expertise without which we cannot introduce the European requirements for sustainable development", he added.