ESG Reporting Requirements in Greece

The New Law 5164/2024  and Its Impact on the Greek Market

The newly enacted Law 5164/2024 constitutes Greece’s national transposition of Directive 2022/2464 of the European Union, reinforcing the regulatory requirements for corporate sustainability disclosures. By broadening the scope of transparency obligations, the legislation extends reporting requirements to a greater number of entities, particularly small and medium-sized listed enterprises, as well as third-country entities operating within the Greek market.

In compliance with Directive (EU) 2022/2464, aims to enhance the transparency of corporate sustainability information by ensuring the disclosure of valid and comparable data from specific businesses, including those with a presence in Greece but headquartered in third countries. Additionally, it guarantees public access to this information and adjusts business classification criteria to align with modern requirements. The introduced amendments seek to improve the content of sustainability reports, harmonize reporting standards, and establish a unified framework for all businesses within the EU.

The new law introduces the obligation for businesses to submit and publish sustainability reports, replacing the previous non-financial reporting process. This requirement applies to:

• Public interest entities, including state-owned S.A. companies where the Greek State holds shares (regardless of ownership percentage), subsidiaries of the Hellenic Corporation of Assets and Participations (not listed on the stock exchange), investment firms, collective investment organizations, management companies, and microfinance institutions.
• Subsidiaries based in Greece that qualify as public interest entities, where the ultimate parent company is governed by third-country law. Similarly, branches of third-country businesses (whether part of a group or not) are also required to publish sustainability reports.
• Only parent companies of large groups are required to submit consolidated sustainability reports.

The new law incorporates the criteria of Directive (EU) 2022/2464 for defining entities, ensuring alignment with the requirements for sustainability reporting obligations.

1. Small entities: Businesses that do not exceed the limits in 2 out of the 3 criteria:

• Total assets: €5.000.000,00
• Net turnover: €10.000.000,00
• Average number of employees: 50

2. Medium entities: Businesses that do not exceed the limits in 2 out of the 3 criteria:

• Total assets: €25.000.000,00
• Net turnover: €50.000.000,00
• Average number of employees: 250

The newly enacted Law 5164/2024 constitutes Greece’s national transposition of Directive 2022/2464 of the European Union, reinforcing the regulatory requirements for corporate sustainability disclosures. By broadening the scope of transparency obligations, the legislation extends reporting requirements to a greater number of entities, particularly small and medium-sized listed enterprises, as well as third-country entities operating within the Greek market. The adoption of these provisions seeks to enhance the comparability and reliability of disclosed sustainability data, thereby fostering investor confidence and ensuring the long-term stability of financial markets.

The European Green Deal represents the European Union’s strategic framework for achieving climate neutrality by 2050. In this context, the European Commission has undertaken a revision of the regulatory framework governing corporate sustainability disclosures, replacing the term “non-financial information” to promote greater transparency. The enhancement of sustainability-related disclosures is deemed critical for the reallocation of capital toward activities that align with the EU’s environmental and social objectives while simultaneously mitigating the risks of misleading environmental claims (“greenwashing”) in financial markets.

The increasing demand for sustainability-related data, particularly from institutional investors, underscores the necessity of assessing both the risks and opportunities associated with climate change, biodiversity loss, and broader social challenges. To this end, the EU has implemented key legislative instruments, including Regulation 2019/2088 on sustainability-related disclosures in the financial sector (SFDR) and Regulation 2020/852 on the classification of sustainable economic activities (Taxonomy Regulation). These regulatory measures aim to improve the comparability, credibility, and transparency of sustainability data, thereby enabling investors to make well-informed decisions regarding the environmental and social impact of economic activities. Furthermore, sustainability reporting serves a broader societal function, informing citizens, social stakeholders, and policymakers of corporate environmental and social performance.

The absence of harmonized regulatory measures exacerbates the disparity between the information disclosed by corporations and the data required by investors. This informational asymmetry impedes the accurate assessment of sustainability risks and may contribute to systemic financial vulnerabilities. Moreover, the limited availability of reliable and standardized data hinders the efficient allocation of financial resources toward enterprises that actively contribute to environmental and social sustainability, thereby obstructing the fulfilment of the objectives set forth in the European Green Deal and the Paris Agreement.

In addition, the lack of universally accepted standards for evaluating sustainability risks presents significant challenges for businesses seeking to comply with emerging regulatory requirements. The absence of a unified accountability framework diminishes public trust in corporate entities, as transparency is widely regarded as a fundamental prerequisite for sustainable market development. Furthermore, discrepancies in national reporting requirements across EU member states contribute to increased administrative burdens and regulatory costs, thereby impeding market integration and reducing the comparability of sustainability data across jurisdictions.

To address these challenges, Directive 2013/34/EU has been amended to strengthen corporate sustainability disclosure obligations. The revised framework significantly expands reporting requirements to encompass a broader range of entities, including small and medium-sized listed companies, as well as third-country enterprises operating within the EU. This legislative intervention is designed to enhance transparency, bolster investor confidence, and promote a fair and equitable competitive environment across European markets.

The absence of effective regulatory interventions risks exacerbating the gap between available and required sustainability information, potentially leading to distortions in investment decision-making. Insufficient disclosure of material sustainability-related risks constrains investors’ ability to accurately assess climate and social risks, resulting in suboptimal capital allocation. Additionally, the lack of harmonized sustainability reporting standards increases regulatory compliance costs for businesses operating in multiple EU jurisdictions.

The recent expansion of sustainability disclosure requirements seeks to remedy these inefficiencies by providing investors and supervisory authorities with reliable, comparable, and decision-useful data. By improving corporate transparency, the revised framework facilitates the accurate assessment of sustainability risks, strengthens market confidence, and ensures that financial resources are directed toward economic activities that support the green transition.