Croatia’s share indices extend gains thanks to Podravka, Adris
Ljubljana share indices end week up, Telekom Slovenije leads gainers
Most Sofia bourse indices fall, Fibank paces blue-chip losers
UPDATE 1 - Bulgarian regulator okays 6.5% hike in Dec natgas price
Zarneni Hrani Bulgaria boosts 9-mo cons net profit, revenue falls
Sep 20, 2023 15:19 EEST
September 20 (SeeNews) - The Bulgarian Stock Exchange [BUL:BSE] plans to launch in the middle of 2024 its new index, which will be tracking eligible companies according to environmental, social and governance (ESG) criteria, BSE's chief executive Manyu Moravenov told SeeNews.
The BSE is partnering with global financial market data provider Refinitiv in order to maximise the ease and automation of ESG data disclosure for local listed companies, Moravenov told SeeNews in an interview on Monday.
You can download the 2022 ESG & Sustainability report Bulgaria here
The calculation of the new ESG index will start with information based on the eligible companies' 2023 annual financial reports. As of this year, there are some 16 Bulgarian public companies which will be required to prepare a non-financial statement or an ESG report for filing to the stock exchange. By 2027, this requirement will affect all companies whose financial instruments are traded on the BSE.
"The most significant challenge before the launch of the new index is for a sufficient number of Bulgarian companies to provide structured ESG information in English, which will subsequently be evaluated according to Refinitiv's methodology. Currently, such information is not available in Refinitiv's database, at least not in the required depth. It is precisely for that reason, we filled in the ESG data for the Bulgarian Stock Exchange itself as a pilot project, and very soon we expect Refinitiv to award the first ESG rating in Bulgaria for a local company," the chief executive explained.
Refinitiv will provide data on the sustainable performance of Bulgarian companies and will calculate their ESG ratings, according to a five-step methodology making use of over 630 data points. The ratings will subsequently be available in Refinitiv's information database, which will make ESG information about Bulgarian companies visible to major foreign investors.
The methodology of the new index has already been adopted by the BSE, in conjunction with local sustainable finance think-tank Green Finance and Energy Centre, which it established together with the Independent Bulgarian Energy Exchange (IBEX). Bulgarian public companies currently have the option of filing their ESG performance data through the online Oxygen platform, which is included in the services offered by the BSE.
Next month, the Sofia bourse expects to complete the process of licensing the GRI Reporting platform, which will give the opportunity to Bulgarian companies to file ESG data according to the standards of the UN-backed Global Reporting Initiative organisation, Moravenov said. Last week, the BSE joined the UN Global Compact, the world's largest corporate sustainability initiative uniting over 15,000 companies and 3,000 non-profit organisations in 160 countries.
In recent years, institutional investors' decisions have increasingly been influenced by considerations related to companies' policies on climate change mitigation and carbon emissions reduction, social and gender inclusion, biodiversity or access to health and education, a 2021 study by the Frankfurt School of Finance & Management showed. Some countries, like Australia, China, South Africa, the UK, India, have introduced some form of mandatory ESG disclosure.
Earlier this year, the EU adopted a new directive, the Corporate Sustainability Reporting Directive (CSRD), and a new set of rules on ESG reporting, the new European Sustainability Reporting Standards (ESRS). Large listed companies, banks and large insurance businesses – this means all EU as well as non-EU listed companies with over 500 staff, will first have to apply the new rules in the 2024 financial year, for reports published in 2025. For SMEs, the timetable means their first sustainability statements will need to be published in 2027, with an opt-out allowing for a final cut-off deadline in 2029.
At present, the BSE does not apply mandatory requirements for ESG reporting for Sofia-listed companies, although in line with EU regulation, public companies with more than 500 employees already report environmental and social aspects of their activities, Moravenov said.
You have run out of free articles this month.
Sign up in for
and get ten (10) free articles per month or sign up for
and get unlimited access.
Browse our free newsletter options