On 20 November 2025, the Ministry of Finance published an Explanation regarding the Guidelines for Non-Financial Reporting in Serbia. As a reminder, the Republic of Serbia introduced the obligation of non-financial reporting into the national legal framework through the Law on Amendments to the Accounting Law in 2019.

What are the Guidelines based on? The Guidelines are primarily based on the EU’s ESRS standards and the Voluntary Sustainability Reporting Standards for small and medium-sized enterprises (VSME). They also integrate relevant elements of the SASB sector-specific sustainability standards (now part of the IFRS Sustainability Disclosure Standards). In addition, they are aligned with other key sustainability reporting frameworks, including the IFRS Sustainability Disclosure Standards and GRI standards.

It is important to highlight which legal entities are subject to the non-financial reporting obligation. In accordance with Article 37 of the Accounting Law (“Official Gazette of the RS”, Nos. 73/2019 and 44/2021 – other law), the entities required to prepare non-financial reports are large legal entities that have the status of public-interest entities and that exceed the threshold of an average of 500 employees on the balance sheet date during the business year. An exception exists for subsidiary legal entities: they are not required to prepare non-financial reports if they are included, together with their parent company, in a consolidated annual management report.

A non-financial report should contain information necessary for understanding the development, business results, and position of the legal entity, as well as the impact of its activities, primarily in the areas of environmental protection, social and employee-related matters, respect for human rights, anti-corruption, and bribery issues, including:

1. a brief description of the entity’s business model;
2. a description of the entity’s policies related to these matters, including due-diligence procedures carried out;
3. the results of these measures;
4. the principal risks related to these matters arising from the entity’s operations, including, where relevant and necessary, its business relationships, products, or services that may cause negative impacts in these areas, as well as how the entity manages these risks;
5. non-financial key performance indicators important for the specific business.

It is important to emphasize that the form of the non-financial report is not prescribed by law; that is, it is not specified whether the non-financial report should be presented as a separate part of the financial statements or as an independent document.

The objective of the Guidelines is to provide a unified reporting framework and clear instructions for large legal entities in order to ensure the comparability of data both across industries and at the national level. They are aligned with the latest standards in climate and sustainability reporting, including the European Sustainability Reporting Standards (ESRS).

Their importance is particularly evident given that the Republic of Serbia aims to align its national legislation with the revised EU Corporate Sustainability Reporting Directive (CSRD) and accompanying sustainability regulations by the end of 2026.