Romania's Roadmap to a Greener Financial System : An analysis of Environmental, Social and Governance Reporting on the Bucharest Exchange Trading Index

Attracting new foreign investment in Romania to support new sustainable infrastructure development is already dependent on the numerous sustainable finance regulations emerging worldwide, in particular the EU Sustainable Finance Action Plan. Scope 1 GHG emissions reported by 9 out of 20 BET listed companies amount to a whopping 5.18 million tonnes CO2e, representing approximately 6.5% of Romania’s emissions. The 20 most liquid, well-known and best performing listed Romania companies (BET20) are still in the early stages of their sustainability journey. At this stage, low levels of disclosure pose significant risks to their ability to attract sustainable investments.Attracting green investments requires initial investments in robust data infrastructure for reporting and performance measurement of sustainability credentials, particularly towards demonstrating EU Taxonomy alignment, disclosing data to allow for seamless EU Sustainable Finance Disclosure Regulation (SFDR) principle-adverse impacts assessments as well as climate related risk disclosures under TCFD and UK legislation. Romanian financial regulators have already taken a proactive approach towards EU Taxonomy integration and reporting by the banking sector (BNR) as well as on climate risk integration in the asset management and insurance sector (ASF). Green bonds successes by Romanian commercial banks would welcome the scaling of the green bond market by a Romanian sovereign green bond issuance towards green infrastructure development