The European Union (EU) is playing a leading role in addressing climate change, highlighting the urgent need for mitigation and adaptation strategies. Achieving the goals of the Paris Agreement and the EU's ambitious goal of becoming the first carbon-neutral continent by 2050 requires strategic allocation of resources and capital. Financial institutions play a critical role in this regard by mobilizing private capital. At the same time, new sustainability reporting regulations are shaping the way companies disclose environmental and climate-related data, such as CO2 emissions. Such transparency is essential for a well-informed financial market. Beyond mere accountability, sustainability reporting leads to strategic changes in companies' goals and performance metrics. This thesis takes an in-depth look at the legal framework and environmental, social, and governance (ESG) standards, and sheds light on the intricacies of the newly introduced reporting requirements. While these reforms are still in their infancy, companies are already showing acceptance of change, even as they acknowledge the need for adjustments. The study sheds light on how prepared Slovenian companies are and identifies specific requirements to facilitate the transition to sustainable development.
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