BULGARIA Law and Practice Contributed by: Nikolay Cvetanov, Boris Lazarov, Asen Apostolov and Patrizia Foffo, Penkov, Markov & Partners
Some minor changes to the Public Offering of Securities Act were also introduced. The new legal framework aims to achieve two key objectives: • the establishment of a “business sustainabil - ity model”, which entails analysing both the financial and asset performance of compa - nies, as well as the socio-economic impact resulting from that performance – by way of introducing the double materiality principle within the means of CSRD; and • the promotion of corporate social responsi - bility across Bulgarian companies, including banks, as part of the European Green Deal’s commitment to ensuring a just transition to a sustainable economic system. In this context, the AA broadens the scope of non-financial information previously reported and increases the number of reporting entities (obliged companies), with most Bulgarian banks being among the first to comply. The obliged entities should include in their annu - al activity report a separate section with infor - mation on sustainability issues (the so-called This document, which is part of the activity report of a company shall include inter alia the following: • information on environmental, social and human rights factors and governance issues that is necessary to understand the impacts of the company on these areas and the asso - ciated risks thereof; • information necessary to understand how the above areas affect the development, perfor - “sustainability report”). Sustainability Report
mance and the good standing of the com - pany – a description of the business model, the sustainability objectives and timelines, a description of the company’s internal policies, strategies, plans, etc; • information on the existence of incentive schemes related to sustainability issues offered to members of management and supervisory bodies; and • reporting shall be carried out under the CSRD standards, prepared by the European Finan - cial Reporting Advisory Group and adopted with Delegated Regulation (ЕС) 2023/2772. Following the preparation of the activity report, including the sustainability report, it will be sub - ject to a statutory audit by a certified auditor in line with the provisions of the Independent Financial Audit Act. Explicit responsibility of the head and members of the management and supervisory body of a company is envisaged for the preparation and publication of the annual reports (including the sustainability report), as well as for conducting an independent financial audit and expressing assurance on sustainability. Regulation (EU) 2022/2554 on the digital opera - tional resilience for the financial sector (DORA), which entered into force on 16 January 2023, shall become directly applicable in all EU mem - ber states, including Bulgaria, as of 17 January 2025. As DORA is an EU regulation, its provisions do not require transposition into national law. Nev - ertheless, certain legislative measures related to 10. DORA 10.1 DORA Requirements
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