The past year has been characterized by a flurry of regulatory changes in the area of environmental, social and governance (ESG) practices, particularly in the context of harmonizing climate, environmental and reporting rules in the Central and Eastern European regions.

Despite the deadline for transposing the Corporate Sustainability Reporting Directive (EU) 2022/2464 (CSRD) in July 2024, some EU Member States have failed to fully implement the directive. The European Commission has initiated infringement procedures against 17 Member States, including the Czech Republic and Romania, and the decision on the next steps in these procedures is not yet clear.

Attention is now focused on the Corporate Sustainability Due Diligence Directive (EU) 2024/1760 (CSDDD), which obliges companies to undertake extensive due diligence obligations for their operations and supply chains. The deadline for transposition of the CSDDD is set for 26 July 2026.

Amendments to environmental and ESG legislation in the Slovak Republic

Environmental Impact Assessment (EIA) Act

On September 17, 2024 The National Council of the Slovak Republic approved an amendment to the law that streamlines and aligns the environmental impact assessment (EIA) process with European standards. The amendment clearly separates the initial screening steps (decision on the need for an EIA) and the determination of the scope of the assessment (what the EIA should cover) from the main environmental assessment itself. The amendment further states:

– Raises standards for experts carrying out EIA,

– Reduces administrative demands, thus minimizing paperwork,

– Simplifies the entire processto make it clearer, faster and more aligned with EU law.

Emissions Trading Act

On September 18, 2024 The National Council of the Slovak Republic approved an amendment to the law that aligns Slovak legislation with EU directives 2023/959 and 2023/958 aimed at modernizing emissions management. The main modifications include:

– Updating key concepts relating to emissions trading,

– Revision of free emission allocations, to better reflect current climate goals,

– Directing auction proceeds to finance low-carbon initiatives,

– Setting conditions for granting permits for greenhouse gas emissions,

– Defining the rules for the validity of emission quotas,

– Support for low-carbon technologies and clear definition of government responsibilities within the emissions system.

Recovery Plan for Europe – State aid schemes in the ESG context

The Slovak Republic is implementing several ESG (Environmental, Social, Governance) related support schemes as part of the National Recovery and Resilience Plan. These schemes include, for example:

– Scheme 1: Supporting the development of infrastructure for alternative fuels and electricity storage,

– Scheme 2: Renewable energy production and storage,

– Scheme 3: Biomethane production and industrial decarbonization,

– Scheme 4: Financial conditions and tenders to support the above initiatives.

These schemes aim to:

– Support the transition to clean energy,

– Increase energy efficiency and reduce carbon footprint,

– Support innovative technologies and environmentally friendly business,

– Ensure financing of projects in various sectors through cooperation with relevant ministries.

Amendments to laws and support schemes within the framework of the Recovery Plan for Europe reflect the Slovak Republic's commitment to sustainable development and the fight against climate change. Harmonization with European standards and implementation of ESG principles are key to increasing environmental protection, social justice and effective management of business processes. Spring