The Bulgarian Parliament has approved amendments to the Accounting Law, mandating that enterprises include a sustainability report in their activity reports. This new requirement, effective for the 2024 accounting year, aims to provide a comprehensive view of corporate sustainability by analyzing both financial and socio-economic impacts of a company’s activities.

Large enterprises, as well as small and medium-sized enterprises (excluding micro-enterprises) whose securities are traded on regulated EU markets, will be required to prepare these reports. Additionally, parent companies of large enterprise groups, as well as subsidiaries and branches of enterprises from non-EU countries, must also produce sustainability reports under certain conditions.

The new law stipulates that large public interest enterprises with more than 500 employees, and parent companies of large groups meeting the same employee criterion, must include sustainability reports in their activity reports starting from the 2024 accounting year. For other enterprises within the scope of the European directive, the obligation to prepare and publish sustainability reports will be phased in gradually, with full implementation expected by 2028.

The sustainability reports will cover aspects such as environmental protection, social rights, human rights, and governance issues. The reports must detail the company's strategies and plans for aligning with a sustainable economy and limiting global warming to 1.5 degrees Celsius, in accordance with the Paris Agreement. This includes setting greenhouse gas reduction targets, describing the role of management and supervisory bodies in sustainability efforts, and assessing both actual and potential impacts on the company’s operations and value chain. Information should address short, medium, and long-term time frames where relevant.

The law also introduces a requirement for enterprise heads to inform and consult with worker representatives regarding the sustainability information, including methods for obtaining and verifying this data. For small and medium-sized enterprises, the report requirements will be scaled to match their capacities and capabilities.