The Sustainable Development Goals (SDGs) and Environmental, Social, and Governance (ESG) criteria are interconnected frameworks guiding sustainable development. The SDGs, established by the UN, provide a global roadmap for addressing critical issues like poverty, inequality, climate change, and environmental degradation by 2030. ESG, meanwhile, is a set of criteria used in the corporate sector to assess companies’ impact on the environment, society, and governance structures.

Both frameworks encourage responsible action: while the SDGs target mainly governments, nonprofits, and communities to achieve specific global goals, ESG focuses on businesses and investors to ensure sustainable practices that contribute to these goals. For example, ESG practices that reduce carbon emissions, promote workplace diversity, and maintain transparent governance directly support the achievement of SDGs like Climate Action (SDG 13), Gender Equality (SDG 5), and Reduced Inequalities (SDG 10). In essence, ESG metrics can be seen as tools for companies to contribute to broader SDG targets, aligning private sector actions with global development goals.

ESG is an acronym for Environmental, Social, and Governance and refers to a set of non-financial standards (many of which have demonstrable financial impact) that companies are increasingly incorporating into their decision-making processes.

(E) Environment – the impact of company activities on the environment (pollution, waste management, preservation of natural resources and climate change mitigation);

(S) Social – the company’s relationship with its stakeholders, e.g. employees, customers, community. This can cover labor relations, diversity and inclusion, employee health and safety, community involvement and respect for human rights;

(G) Governance – the extent to which the company complies with governance requirements, e.g. leadership, legal compliance and adherence, shareholder rights, etc. It focuses on the organization’s governance structures and control mechanisms. This includes issues such as business ethics and integrity, transparency, compliance with laws and regulations, evaluation and internal audit.

When speaking about ESG, organisations also use a number of terms such as Corporate Responsibility, Sustainability, Sustainable Development and others.

ESG (Non-financial) reporting is not currently mandatory for entities in the RM, but many companies that are part of multinational groups do it voluntarily, as well as in line with Group policies.

At the same time, it is necessary to mention that in connection with the EU accession process and in accordance with all the commitments of the Republic of Moldova undertaken to counteract harmful climate change, reporting will become a mandatory activity for organizations in our country in the near future.

Likewise, local entities wishing to export goods and services to the EU will gain competitiveness benefits and facilitated access to the desired markets, if they will implement the ESG principles and report on them publicly.

Stages of ESG Reporting:

1. Drafting the ESG Strategy, assessing the following aspects

• Environmental impact
• Social impact
• Corporate governance

2. Disclosure of Reports and Commitments

In EU countries where reporting on ESG reporting is mandatory, it is done differently depending on the national regulatory framework. For example, in Romania, reporting is submitted as part of the annual financial statements reporting exercise.

Companies also submit their ESG Strategies and Sustainability Reports on their official websites and disseminate them to stakeholders through various channels to ensure accessibility and transparency.

For a better understanding on the Non-financial reports elaborated by the large companies in Moldova with foreign direct investments, please follow the links: