Climate Governance Initiative


3 August 2023

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This section is to be read in conjunction with the above EU section, and focuses specifically on rules under Romanian law regarding directors’ duties and obligations as they pertain to climate change.

Regulators and government bodies in Romania have recognised that climate change is a global challenge that requires a responsible approach and concrete action at global, regional, national and local levels.

Romania has signed and ratified into national legislation both treaties: the United Nations Framework Convention on Climate Change (UNFCCC) by Law No. 24/1994, as well as the Kyoto Protocol by Law No. 3/2001. Moreover, Romania ratified the Paris Agreement by Law No. 57/2017 and entered into force on 1 June 2017. The Paris Agreement was adopted by 196 Parties, including the EU and its Member States at COP 21 in Paris, on 12 December 2015 and entered into force on 4 November 2016 (Paris Agreement) and includes a goal of limiting global warming to well below 2°C, preferably to 1.5°C, compared to pre-industrial levels.

Romania remains firmly committed to the international legal framework developed by the United Nations – the 2030 Agenda for Sustainable Development, the Paris Agreement, Kyoto Protocol and the UNFCCC.

National Bank of Romania

There is a concern at the level of National Bank of Romania (NBR) about green financing and the sustainability of climate change, respectively how well the Romanian economy and the banking sector would withstand in the context of climate change. A study has been launched in this regard and its result, which was also presented in the 2019 Financial Stability Report,1 shows that the stakes are important, both for the authorities and for the private environment. NBR has recognised climate change as a threat to Romania’s financial system, with non-financial companies potentially subject to climate change risks generating 40% of gross added value to the economy.2

In this regard, NBR pays special attention in identifying the financial risks related to climate change and is developing a framework for monitoring economic sectors that may be affected by climate risk and their importance to the banking sector. 

In September 2020, NBR became a member of the group of central banks and financial supervisors called the Network for Greening the Financial System (NGFS). In order to stimulate green financing, NBR has decided to set up at the level of the National Committee for Macroprudential Oversight (NCMO) a working group which has over 90 members both from the state (NBR, ministries, regulators), as well as from the private environment. The NCMO report put forward recommendations for authorities with short implementation deadlines, covering three areas: sustainably increasing access to finance for climate change projects, supporting structural change in the economy towards higher value-added and improving transparency, reporting and the availability of information on climate change, as well as raising awareness of the impact of climate change on society and the financial system.3

On April 2022, NBR Regulation No. 5/2022 partially came into force, amending and supplementing NBR Regulation No. 5/2013 on capital requirements for credit institutions and repealing certain pieces of legislation, inter alia, incorporating into the national legislation the Guidelines issued by the European Banking Authority (EBA) on loan origination and monitoring.

One of the topics addressed by NBR Regulation No. 5/2022 is incorporating into national legislation the EBA recommendations for credit institutions to consider environmental, social and governance (ESG) in the lending process.

Since 1 April 2022, credit institutions are required to:

  • put in place an adequate strategy for credit-risk analysis to include ESG factors;
  • include in their policies and procedures ESG factors and related risks (e.g. the physical risk of climate change over the financial performance of the borrower, the transition risk that a transition to a low carbon economy might have over the borrower, market changes, etc.).

According to 2022 Financial Stability Report4, since May 2022, NBR began to collect information from credit institutions with respect to green lending, in order to supplement the Credit Risk Center within the NBR with information on green loans, based on the European taxonomy. Given the impact of climate change, green lending is a developing market, in which Romanian credit institutions assume the role of main contributors in the process of raising public awareness of the importance of the concept of sustainability, offering banking products and services in line with the new ESG policies.

Financial Supervisory Authority

The strategy of the Financial Supervisory Authority (FSA) for the period 2021-2023 contains both the Strategic Objectives of the FSA and the program of activities, which are adapted to new realities and unprecedented challenges brought by the Covid-19 pandemic, as well as ESG, aiming to fulfil the strategic role of the institution.5 

Under these circumstances, the FSA’s risk analysis activities will focus on integrating the new perspectives generated by financial innovation and environmental, social and governance (ESG) factors. In order to ensure cross-sectoral convergence and harmonization of rules and practices at the level of the three financial sectors, the FSA envisages to issue, inter alia, an integrated regulation on content, methodologies and presentation information on sustainability indicators in the financial services sector (ESG risks) with a view to establishing harmonized and transparent rules on informing investors in non-banking financial products on environmental and social risks and governance associated with investments. 

The FSA has published the ‘Recommendations for a prudent approach to climate risk’.6 The purpose of these recommendations is to support entities supervised by the FSA by providing a first set of information on sustainable financing, in particular on the growing importance of sustainability risks, in a global, European and local context, by making every effort to support the financing of environmentally sustainable activities with a view to transform real savings into long-term sustainable ones.

Bucharest Stock Exchange

The Bucharest Stock Exchange (BSE) is a partner exchange to the United Nations Sustainable Stock Exchanges (SSE) initiative. In April 2022, the BSE published ESG Reporting Guidelines in which it sets out its form of recommended disclosures on ESG issues, including, inter alia: 

  • Integrating sustainability
  • Sustainability governance

In Romania, companies covered by the NFRD now have the opportunity to present the required information on ESG either:

  • in a management report; or 
  • in a separate report, which is not part of the management report on sustainability (provided that the deadline for the publication of such a report does not exceed six months from the date of submission of the balance sheet).

However, as the CSRD comes into force, this option will no longer be available and the requested ESG information will have to be published in the management report.

Moreover, BSE launched a dedicated ESG Scores section on the website which includes the ESG parameters of the BSE listed companies, calculated in the ESG analysis reports made by Sustainalytics (at this moment, the scores corresponding to the 2021 reports are published on a voluntary basis, with the approval of the issuers).

Directors’ duties and climate change

Generally, directors are authorised to perform all acts necessary and useful for the conduct of the company’s business, other than those acts requiring the approval of shareholders at a general meeting. These acts are found in the articles of association of the company and/or are expressly provided for by Romanian law.

The Romanian law imposes certain general duties on directors of companies. In this regard, it is provided that the directors must fulfil their duties acting diligently, with loyalty, in the interest of the company, as well as within the limit of their powers. 

The directors are liable to the company for losses caused to it by their wilful misconduct or inaction. 

Considering that the Company Law No. 31/1990, as modified, does not explicitly provide for directors’ duties to address the risk of the adverse impacts of climate change on the company, it could be however interpreted that their obligation to cover this risk is included in their overall responsibility and failure to do so may lead to damage suffered by the company and personal liability. Indeed, in light of the focus by Romanian regulators and the government on climate change risks and finance, as discussed above, directors should consider the risks and opportunities posed by climate change in order to ensure that they are fulfilling their duties to the company. 

Directors’ disclosure obligations and climate change

As a rule, the directors are responsible for ensuring that their companies comply with all relevant statutory obligations, including environment-related disclosure. 

In November 2022, the European Commission adopted the Corporate Sustainability Reporting Directive (CSRD). The CSRD provides for more stringent and harmonised reporting obligations. Sustainability information disclosed pursuant to the CSRD will be required to be assured. The first companies required to report under the CSRD (those which are already subject to the EU Non-Financial Reporting Directive (NFRD)) will be required to make their first CSRD disclosures in 2025, in respect of FY2024. Sustainability information disclosed pursuant to the CSRD will be required to be disclosed as part of the management report and will be subject to assurance. The CSRD has not yet been transposed into national Romanian law. Further information is available in the above EU section. 

Public and private entities

According to the Romanian accounting regulations on financial statements, both public and private entities that, at the balance sheet date, exceed the criterion of having an average number of 500 employees (FTEs) during the financial year should include in the directors’ report a non-financial statement containing, insofar as it is necessary to understand the development, performance and position of the entity and the impact of its work, information on environmental issues. If such an entity does not implement policies regarding one or more of the aspects previously mentioned, the non-financial statement should provide a clear and reasoned explanation of this option (the ‘comply or explain’ principle).

The non-financial statement should contain, in relation to the environmental aspects, details of the current and foreseeable impact of the entity’s operations on the environment and, where applicable, on health and safety, use of renewable and non-renewable energy, greenhouse gas emissions, water use and air pollution. Furthermore, the non-financial statement must also include the consequences for the entity’s climate change activity and the use of the goods and services it produces, as well as for its commitments to sustainable development.

Specifically, the report must cover:

  • The company’s business model;
  • The policies pursued to address these ESG risks, including due diligence applied;
  • The outcome of these policies;
  • The main ESG risks resulting from the company’s own operations and, where relevant and proportionate, its business relationships, products or services;
  • Non-financial key performance indicators related to the company’s response to ESG risks.

Securities and stock exchange-related disclosures 

The BSE regulates under its code that a listed company must continuously provide to the BSE, inter alia, the information related to the occurrence of any environmental factor that could significantly affect the functioning or activity of a listed company.

Therefore, Romanian companies listed on the stock exchange are obliged to insert within the reports submitted to the BSE a description of any climate risk-related information which can significantly affect the listed company in its business activities.

Further, as set out above, the ESG Reporting Guidelines issued by the BSE, while voluntary, set out a best practice approach for Romanian listed companies to fulfil their reporting obligations under relevant EU law.

In Romania, environmental monitoring by the state is conducted, through the National Authority for Environment Protection, by means of collecting and processing data on environmental matters as reported by companies. Such state statistical reporting is mandatory and covers, among others, air and water. The following discusses reporting obligations most relevant to climate change:

Greenhouse gas emissions

On January 14, 2019 the Romanian Law No. 14/2019 entered into force, establishing the legal, institutional and procedural framework necessary for the application of Decision No. 406/2009/EC on the effort of Member States to reduce their greenhouse gas emissions to meet the Community’s greenhouse gas emission reduction commitments up to 2020. This law establishes the legal, institutional and procedural framework for the application of this Decision in order to ensure Romania's contribution to the European Union's commitment by limiting the increase in greenhouse gas emissions by 2020 to a level of 19% compared to the level of emissions in 2005. Moreover, we expect in the near future that the Romanian regulators will set out binding national climate targets in accordance with the agreement between EU leaders and European Parliament negotiators in which it is envisaged a gradual reduction in greenhouse gas emissions compared with 1990 levels, with at least a 55 percent reduction target by the year 2030, and a long-term goal to reach a greenhouse gas neutrality by 2050. Under such scenario, there may be regulated further obligations related to this topic for certain industrial companies.

Practical implications for Directors

Considering that regulators in Romania, including, but not limited to, the Romanian Government, NBR, FSA and BSE, have become increasingly emphatic regarding the need for companies and their directors to adopt climate resilience measures in business practices and disclosure, and the likely coming into effect of expanded climate and ESG disclosure, a well-counselled board will: 

  1. delegate climate risk identification and evaluation to a clearly identified team in management that reports directly to the CEO and board; 
  2. put on the agenda for the board within 3 or 6 months a process to initiate the development of a climate transition roadmap to 2050 with transparent carbon neutrality or reduction targets, with clear interim targets to 2040, 2030 and the current rolling multi-year strategic plan, and periodically thereafter report back to the board;
  3. delegate to the appropriate committee(s) of the board, such as risk, audit, legal and governance, scenarios/strategy, nominations/remuneration, or sustainability/corporate responsibility, the task of translating the long-term strategy into a clear decision-making process for each aspect that is relevant to each committee; and
  4. discuss with disclosure counsel, to develop an external engagement and communications plan and to oversee rigorous disclosure and accounting.


  • Cristina Reichmann, CMS Cameron McKenna Nabarro Olswang LLP SCP
  • Mircea Ciută, CMS Cameron McKenna Nabarro Olswang LLP SCP
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End notes:

1:  National Bank of Romania, Financial Stability Report Year IV (XIV), No. 7 (June 2019) <,-2019-19835.aspx>.
2:  National Bank of Romania, Financial Stability Report Year VII (XVII), No. 13 (December 2022) <>.
3:  NCMO, Analysis of the NCMO Working Group on supporting green finance (2021) <>.
4:  National Bank of Romania, Financial Stability Report Year VI (XVII), No. 13 (December 2022)
5:  Financial Supervisory Authority, The Strategy of the Financial Supervisory Authority for 2021-2023 (31 July 2020) <>; Financial Supervisory Authority, Recomandări privind abordarea prudentă a riscului climatic, <>.
6:  Financial Supervisory Authority, Recommendations for a prudent approach to climate risk (June 2022) <>.