Taming the dragon: ESG implementation – risks demystified

On 26 October 2022, CMS Belgrade hosted the largest ESG regulatory conference in the region.
More than 180 ESG professionals from some 150 Serbian corporations gathered to learn
how ESG regulations and trends are reshaping the business landscape in the EU and
where Serbia stands on the path of ESG implementation. 

The ESG conference called “TAMING THE DRAGON: ESG implementation – risks demystified” gathered unprecedented number of professionals from various industries, predominantly finance, real estate and FMCG, eager to learn how ESG regulations and trends are reshaping the business landscape in the EU and how ESG pioneers in Serbia are dealing with the challenges of ESG implementation in such an advancing environment.

The introductory speech by CMS Belgrade Managing Partner Radivoje Petrikić and a vibrant presentation of CMS Reich-Rohrwig Hainz Partner and Head of CMS Sustainability for Austria and CEE, Dr Döne Yalçın made it clear that regulations are shifting from soft to hard laws, from the NFRD to the CSRD, and that compliance needs to be tackled now. 

Radivoje Petrikić, CMS Belgrade Managing Partner, emphasized that “disregarding the ESG regulations and standards now may result in future penalization, absence of investments, or even loss of important clients, but may also trigger the responsibility of the management and managing boards, due to their neglect of fiduciary duty and lack of proper due diligence procedures.”

Döne Yalçın, CMS Head of Sustainability for CEE, Austria and Turkey, explained that in line with the “no one will be left behind” pledge, new ESG compliance requirements will affect EU companies but also non-EU companies with significant operations in EU and those integrated into value chains of large EU companies. 

A panel discussion with amazing speakers, moderated by Danko Kalkan, EY ESG Manager, brought to attention topics from different industries and shed the light on the importance of cooperation of all participants in the supply chain, especially those integrated into German supply chains, given the upcoming introduction of ESG due diligence reporting that will affect Serbian suppliers of German companies. 

Dragana Bajić, CMS Belgrade Partner and Head of Labour and Data Protection, believes that the biggest challenge in tackling the S pillar in ESG implementation will be setting the non-discriminatory tone and practice of diversity, equality, and inclusion in Serbian companies. She concludes that Serbian companies with appetite for integration into German and EU supply chains will be required to take concrete actions, educate their employees, and raise positive awareness on the topics of human rights, diversity, inclusion, and equality at the workplace. Demonstrating these undertakings will be required under the upcoming sustainable due diligence reporting rules, with the first rules starting to apply as of the beginning of 2023 for suppliers of large German companies.
 
To conclude, ESG compliance regulations are stepping up and Serbian companies will need to work on their readiness to comply with the upcoming reporting requirements. ESG is no longer nice to have, but it is a necessary business strategy for all corporations shaping a sustainable future.

To read the key takeaways of the panelists from Delta Holding, Procredit Bank Serbia, Cushman Wakefield CBS International Serbia, and Delhaize Serbia, please download the press release.

The event was supported by CANSEE - Canadian-Serbian Business Association.