Results of the first analysis of sustainability reports of issuers listed on the Zagreb Stock Exchange

The Croatian Financial Services Supervisory Agency (Hanfa) has published the results of the first analysis of sustainability reports and accompanying audit reports for the 2024 financial year. This marks the first major review of the implementation of new requirements arising from national legislation and key European Sustainability Reporting Standards (ESRS). The analysis covered entities subject to sustainability reporting obligations, i.e., issuers listed on the regulated market of the Zagreb Stock Exchange. Its purpose was to identify topics relevant to issuers, potential challenges they face in preparing reports, and to improve the quality of sustainability information in future reporting periods.

All 40 issuers on the Zagreb Stock Exchange prepared the report, and 93% of them also submitted the mandatory auditor’s assurance on sustainability reporting as part of their annual report. Despite the complexity of the first year of implementation, issuers approached the new regulatory requirements seriously, as demonstrated: by the key findings of the analysis:

• In 88% of cases (35 out of 40 issuers), auditors issued an unqualified limited assurance conclusion, meaning no significant misstatements were found in the sustainability reports in accordance with the ESRS and the Taxonomy Regulation requirements.
• The remaining five issuers (12%) received a qualified limited assurance conclusion, indicating areas where further alignment is needed with the Taxonomy Regulation, ESRS, and disclosures related to greenhouse gas emissions.

Issuers focused primarily on topics identified as material – climate change (100%), own workforce (98%), consumers and end users (85%), and business conduct and corporate culture (98%). Social standards were significantly less represented in disclosures: over 75% of issuers did not disclose information on workers in the value chain, and 65% did not report on affected communities. In the environmental area, the least reported topics were biodiversity and pollution.

Notable efforts by issuers were observed in establishing the foundations for transparent and compliant reporting under the new regulatory framework. However, there remains room for improvement regarding disclosures of greenhouse gas emissions (three issuers did not publish them), the adoption of transition plans for climate change mitigation (only seven issuers reported having adopted such a plan), setting target values for all material topics (just over two-thirds of issuers fully or partially defined such targets), and the adoption of long-term sustainability strategies.

Regarding indicators under the Taxonomy Regulation, only two issuers did not publish any taxonomy indicators. The largest share of issuers disclosed the share of capital expenditures (CapEx) allocated to taxonomy-eligible activities, while as many as 87% did not report any taxonomy-aligned activities. This indicates that there is still room for further improvement in achieving sustainability objectives.