ESG Litigation Guide

Greece

Governance

Corporate Governance

The CS3D was published in the Official Journal on 5 July 2024 and entered into force on 25 July 2024.

It will apply to in-scope companies on a staggered basis, and Member States have until 26 July 2026 to transpose  it into national law. 

The CS3D will apply to large EU and non-EU companies and parent companies doing business in the EU on a staggered basis, allowing smaller companies more time to make any necessary changes to allow them to properly adhere to the requirements. 

The requirements will come into force on the following timescale:

26 July 2027:

  • EU companies with a global turnover of greater than EUR 1,500 million and more than 5,000 employees.
  • Non-EU companies with an EU turnover of greater than EUR 1,500 million

26 July 2028:

  • EU companies with a global turnover of greater than EUR 900 million and more than 3,000 employees
  • Non-EU companies with an EU turnover of greater than EUR 900 million

26 July 2029:

  • All other companies in scope:
    • EU companies with a global turnover of greater than EUR 450 million and more than 1,000 employees
    • Non-EU companies with an EU turnover of greater than EUR 450 million
    • EU companies / EU ultimate parent companies of a group with a net worldwide turnover in excess of EUR 80 million and a franchise or licence business model in the EU with royalties amounting to more than EUR 22.5 million
    • Non-EU companies / non-EU ultimate parent companies of a group with a net EU turnover in excess of EUR 80 million AND a franchise or licence business model in the EU with royalties amounting to more than EUR 22.5 million 

The CS3D will only apply to companies who remain in scope for two consecutive financial years. 

Under Article 2 of CSDDD, an ultimate parent company whose main activity is holding shares in operational subsidiaries may apply for an exemption from its CS3D obligations, provided that (i) it does not engage in taking management, operational or financial decisions affecting the group or its operational subsidiaries; and (ii) one of its EU subsidiaries is designated to comply with the CS3D requirements on its behalf. The parent and subsidiary will be jointly liable for compliance. 

Small and medium-sized companies are not covered by the CS3D but may be indirectly affected as business partners in value chains.

The CS3D is a flagship piece of EU legislation, aimed at ensuring companies operating in the EU are performing detailed and comprehensive corporate due diligence across their own operations, those of their subsidiaries, and across their “chain(s) of activities” in a consistent and verifiable manner.

Duties and obligations under the CS3D

The Directive sets out a “duty of due diligence”,  requiring in-scope companies to undertake due diligence for actual or potential adverse human rights and environmental impacts in their own operations, those of their subsidiaries and in their chains of activities (direct and indirect established business relationships). There are a number of ‘core’ obligations that in-scope companies must meet as laid down in Articles 7-16 of the Directive:

  • Integrating due diligence into their policies and risk management systems.
  • Identifying and assessing actual or potential adverse impacts and, where necessary, prioritising actual and potential adverse impacts.
  • Preventing and mitigating potential adverse impacts, and bringing actual adverse impacts to an end and minimising their extent.
  • Providing remediation for actual adverse impacts.
  • Carrying out meaningful engagement with stakeholders. 
  • Establishing and maintaining a notification mechanism and a complaints procedure.
  • Monitoring the effectiveness of their due diligence policy and measures.
  • Publicly communicating on due diligence. 

The obligations and requirements set out above are expanded upon within the text of the Articles, and qualified and explained by the later Articles and accompanying policy documents/FAQs. 

In-scope companies are also required to adopt and implement a climate change mitigation plan to ensure their business strategy is compatible with limiting global warming to 1.5 °C in line with the Paris Agreement.  

The Directive is designed to operate in harmony with the Corporate Sustainability Reporting Directive (“CSRD”), and as such, does not impose any significant disclosure obligations for companies that are already compliant with the CSRD. Companies in-scope for the CS3D but not in-scope for the CSRD must publish an annual report, the exact content of which will be specified by the EU through delegated acts, by 2027 at the latest.   

Implementation by Member States

Member States are required to bring the CS3D into national law by 26 July 2026, although it is expected that many Member States will start legislating sooner. Member States will be required to appoint national supervising authorities who will be responsible for supervising the new rules and who will have significant powers 

Each Member State will be required to implement the core requirements of the CS3D into their national law, but the Directive leaves room for the Member States to set more stringent due diligence requirements should they wish. Stakeholders should therefore be careful to make sure they abide by the laws of each Member State (many of which have pre-existing sustainability due diligence laws), as well as the core obligations set out in the EU legislation.

Penalties/Fines

Under the Directive,  Member States’ respective supervisory authorities will have powers enabling them to require companies to provide further information, to conduct compliance investigations, and to allow inspections of the relevant companies.  Failures of compliance will entitle the supervisory authorities to exercise all or any of the following powers:

  • To order:
    • The cessation of any infringement
    • That the company not repeat the infringement
    • Provision of remediation to any stakeholders affected
  • To impose financial or other penalties. The maximum penalty allowable under the legislation is 5% of the worldwide turnover of the entity in question from the preceding financial year.  This penalty may be increased according to the formulation of the laws implemented by particular Member States.
  • To impose relevant interim measures to avoid an imminent risk of severe harm arising from the infringement.

The CS3D also creates a regulated civil liability regime whereby natural persons/entities/other stakeholders will have the opportunity to take legal action for damages suffered that could have been avoided with appropriate due diligence measures. 

Financial undertakings

Financial undertakings have an exclusion from part of the CS3D obligations in relation to their downstream chain of activities.

Further Reading

The European Commission has published a helpful set of FAQs here

For more information, please see the below articles:

Environmental
Social
Governance

Non-financial reporting

The CSRD entered into force on January 5, 2023.

The rules will start applying between 2024 and 2028 in the following increments:

  • For the year commencing 1 January 2024: Large public-interest companies (with over 500 employees) already subject to the non-financial reporting directive, with the relevant reports due in 2025;
  • For the year commencing 1 January 2025:  Large companies that are not presently subject to the non-financial reporting directive (with more than 250 employees and/or €40 million in turnover and/or €20 million in total assets), with the relevant reports due in 2026;
  • For the year commencing 1 January 2026:  Listed small and medium sized enterprises (SMEs) and other undertakings (small and non-complex credit institutions and captive insurance undertakings), with the relevant reports due in 2027. SMEs can opt-out until 2028.
  • For the year commencing 1 January 2028:  Non-EU companies with net sales in the EU of more than EUR 150 million and at least one subsidiary or  branch in the EU, with the relevant reports due in 2029

Listed companies, and large companies in particular.

The CSRD is a flagship piece of legislation that, once brought into national law, will impose tighter reporting standards and   obligations on in scope companies in relation to their disclosure of pertinent sustainability information.

The CSRD replaces the Non Financial Reporting Directive (NFRD), and is aimed at, amongst other things, addressing shortcomings in the existing legislation, and expanding the scope of the disclosure required by the relevant entities.

The CSRD introduces more detailed reporting requirements in relation to companies’ environmental, social,  and human rights impacts.  The stated aim of the legislation is to “modernise and strengthen the rules concerning the social and environmental information that companies have to report ….. to ensure that investors and other stakeholders have access to the information they need to assess the impact of companies on people and the environment and for investors to assess financial risks and opportunities arising from climate change and other sustainability issues.”

To ensure the relevant companies are providing reliable information, they will be subject to independent auditing and certification. The legislation aims to put financial and sustainability reporting on equal footings, and give investors access to similarly granular sustainability data as they would have financial information.  

The reporting standards required are enshrined in the European Sustainability Reporting Standards (ESRS), which the European commission adopted on 31 July 2023. A detailed article on the ESRS can be found here.

Transposition Status

For a summary of the transposition status of the CSRD, please see the Hogan Lovells CSRD Transposition tracker here . The EU also publishes a list of member states who have transposed the CSRD into national law, as well as links to the underlying legislation (see here).

The European Commission recently published a number of draft FAQs (see here) clarifying the scope of the CSRD, amongst other regulations. See these useful articles “Three months on from the CSRD transposition deadline – where are we now” and “European Commission publishes draft FAQs on EU Corporate Sustainability Reporting Directive (CSRD)” for more information.

Environmental
Governance

Financial reporting

Entry into force: 10 March 2021

Application: 

  • Level 1 (high level and principles based requirements on a comply or explain basis) since 10 March 2021.
  • Level 2 (more detailed disclosure requirements in relation to regulatory technical standards) since January 2022.

Financial advisers and financial market participants

The SFDR is part of the EU Commission’s “Action Plan on Sustainable Growth”, and is intended to complement the EU Taxonomy Regulations and the EU Regulatory Technical Standards. The SFDR is designed to enable investors and consumers to make informed investment decisions with respect to the ESG credentials of the funds, assets, or products they are investing in/purchasing, with a view to investors making decisions that contribute to sustainable growth in the financial sector. It is hoped that its adoption will provide clarity and consistency as to the language used by FMPs when selling investment products, especially those described as ‘sustainable’ or ‘ESG focused’, or a number of other adjacent terms. In particular, the Commission hopes to eliminate ‘greenwashing’ from the investment landscape, and force FMPs to make undertake proper due diligence as to the nature of the underlying products they are selling and/or providing.

Product level classification

The SFDR requires FMPs, whenever they are offering financial products purporting to be one of the below, to make certain disclosures as to the natures of the relevant products, which will either fall into Articles 8 or 9 of the Regulation:

  • Those promoting environmental and/or social characteristics, and those for which the investee company follows ‘good governance practices’ (Article 8 products)
    • The Regulation does not specifically define ‘environmental and/or social characteristics’, nor ‘good governance practices’, but gives a number of examples of activities that would be regarded as contributing to each area. 
  • Those having sustainable investments as an objective (Article 9 products)
  • Sustainable investments products specifically relating to carbon emissions reductions (Article 9(3) products).

The mandatory disclosure requirements for FMPs to promote Article 8 and Article 9 products differ substantially, with Article 9 products subject to more stringent disclosure obligations.  Distinguishing between Article 8 and Article 9 products is critical for FMPs to ensure they adhere to the requirements of the SFDR.  The disclosure rules are complex, with disclosure at a granular level required, particularly for Article 9 companies, the detail of which is beyond the scope of this note. For more information, see details of the regulation here.

Firm level classification

Article 3 of the Regulation also requires in scope entities/individuals to publish, on their website, three broad categories of information in relation to the integration of sustainability risks into their investment process, both at the firm and product levels:

1. Principal adverse impact (Article 4) - how investments might create or lead to possible adverse impacts in relation to a range of sustainability factors.  This requirement is by far and away the hardest and most complicated for firms to navigate, as it requires access to detailed ESG data, which most firms do not generate during the normal course of their business.  A notable feature of Article 4 is the requirement to explain the provenance of the ESG data, or, where data is unavailable, explain why the data is unavailable, and provide best estimates in its place. 

Under this heading, in-scope companies must report on 14 different sustainability related factors, ranging across a spectrum of ESG risks.

Included in this is the key requirement for in scope entities to understand and report on the Scope 1, 2, and 3 emissions for companies they have invested in.  As detailed elsewhere on the GVT, Scope 1 emissions are those directly produced by the company, Scope 2 emissions are those produced by energy it purchases for its direct use (for example, the emissions deriving from the purchase of electricity), and Scope 3 emissions are those for which the company is responsible for up and down its value chain. For FMPs, the vast majority of their emissions will be categorised as Scope 3, given their economic activities do not involve energy intensive means of production.

Scope 3 emissions are also the most difficult to track and assess. For more information on Scope 1/2/3 emissions measuring, see here.

2. Remuneration (Article 5) – in scope FMPs must publish a statement stating how sustainability risks are taken into account in their remuneration policy. 

3. Sustainability risk policy (Article 6) - how ESG risk is considered in the investment process and how these risks are taken into account in any and all investment decisions. This must detail the ‘likely impacts’ of those risks on the returns of the products they are providing or advising on.  Even in circumstances where there are no risks identified, or where the risks are ‘not relevant’, FMPs must make clear why these risks are not relevant.

These Article 4-6 disclosures must be made:

  • in the relevant documentation for a specific financial product; and
  • on the FMP’s website.

Comply or explain policy

Under the comply or explain rule, if an FMP does not consider the ESG/sustainability impact(s) of its decisions/investments, it must publish a statement this effect on their website and give clear and detailed reasons for failing to comply with the requirement under the Regulation.

The Regulation may also require additional disclosure of sustainability information in relation to certain financial products purporting to promote ESG objectives.

Stakeholder consultation

In late 2023, the Commission launched a consultation through which stakeholders could provide feedback on the implementation of the SFDR, alongside their suggestions for future changes/amendments. On 3 May 2024 the Commission published a summary of the responses received, which highlighted the need to ensure consistency across EU sustainability regulation and legislation, as well as providing clarity on the exact disclosures required under the SFDR. For more detail, please see the summary here, as well as this article. It is anticipated that further consultations will follow.

For more information generally, please see these articles (and this analysis piece):

Governance

Law

Pending adoption / not yet in force

Investment Firms

  • Under the draft law, the remuneration policies and practices of investment firms shall be gender-neutral.

  • Variable remuneration awarded and paid by an investment firm shall also, when assessing the performance of the individual, take into account non-financial criteria (such as ESG factors).
Governance

Law

In force

Large listed undertakings defined in the law as undertakings which, on the date of their annual balance sheet, have an average of more than 500 employees during the relevant fiscal year.

Under the law, large (i.e. entities which, on the date of their annual balance sheet, have an average of more than 500 employees during the relevant fiscal year) listed companies shall have in place a sustainability policy (which forms part of their Internal Rules of Operation).

Find out more:

Corporate Law 4548/2018 (art. 110 - 111, implementing art. 9a of Directive 2007/26 EC, Directive 2017/828/EU and article 112, implementing art. 9b of Directive 2007/26 EC, Directive 2017/828/EU)

Consolidated form of Corporate Law 4548/2018 available in non-governmental source

Governance

Law

In force

Bribery committed within the Greek territory, regardless of the nationality of the culprit.

Punishable acts include:

  • bribery acts committed by Greek individuals/companies abroad provided that such act(s) are characterized by Greek Criminal Code as felonies or misdemeanours and are punishable under the laws of the country they took place, or if they took place in a country without a proper government;
  • bribery acts committed by foreign individuals/companies outside Greek jurisdiction provided that such act(s) are characterized by Greek Criminal Code as felonies or misdemeanours, that are committed against Greek citizens and are punishable under the laws of the country they took place, or if they took place in a country without a proper government.

Anti-bribery and other anti-corruption provisions are all included in the Greek Criminal Code, as amended and in force. In particular, the Greek Criminal Code deals with bribery as follows:

  • Art. 235 and 236: passive and active bribery, respectively;
  • Art. 237: active and passive bribery of a judge;
  • Art. 159 and 159A: passive and active bribery of political officials, respectively;
  • Art. 237a: Merchandise of Influence - Intermediaries, i.e., bribes that were carried out through an intermediary or third party;
  • Art. 396: passive and active bribery in the private sector.

Furthermore, Greece has ratified all major conventions on combating corruption both on an international and European level and therefore domestic legislation as regards bribery and corruption complies with the international and European legal framework.

Find out more:

Greek Criminal Code, as amended and in force

Consolidated form of the Greek Criminal Code available in non-governmental source

Governance

Law

In force

Greek registered companies and non-Greek registered companies having permanent establishment in Greece.

  • Law 4557/2018 on Money Laundering, as amended and in force, provides that in the event that bribery acts (as a predicate offence to money laundering) are committed for the benefit of a company in violation of the common provisions of Criminal Code or special legislation enacted for the purposes of ratifying international treaties and conventions against corruption, special administrative sanctions may be imposed against the company.The above legislation is also supported by guidelines in relation to compliance issues circulated primarily by the Ministry of Finance and/or the Bank of Greece.
  • The Law for Greek Accounting Standards (L. 4308/2014), the Income Tax Code (L. 4172/2013) and L. 4557/2018 on Money Laundering, as amended and in force, require companies to register all transactions with their books in accordance with certain rules, making all transactions readily and duly traceable. Besides, companies are obliged to annually file financial statements with the Tax Authority as well as to annually publish their balance sheets following external auditing.
  • The above legislation is also supported by guidelines in relation to compliance issues circulated primarily by the Ministry of Finance and/or the Bank of Greece.

Find out more:

1. Law 4308/2014 (Law for Greek Accounting Standards), as amended and in force

Consolidated form of Law 4308/2014 (Law for Greek Accounting Standards) available in non-governmental source

2. Law 4172/2013 (Income Tax Code), as amended and in force

Consolidated form of Law 4172/2013 ( Income Tax Code) available in non-governmental source

3. Law 4557/2018 on Money Laundering, as amended and in force

Consolidated form of Law 4557/2018 on Money Laundering available in non-governmental source

 

Governance

Corporate governance policy

Entry into force: 9 June 2017

Companies that have their registered office in the EU and their shares listed on a regulated market in the EU.

SRD II enhances the SRD regime by introducing rules that aim to counter an excessive focus on short-term profits and risk-taking in favour of a longer term, more sustainable model of corporate governance that considers the wider interests of shareholders and stakeholders.

Environmental
Governance

Financial reporting

Published by the EC on 21 April 2021.

Application: rules expected to start applying from around October 2022.

Firms within the scope of MiFID, AIFMD and UCITS.

The proposed amendments set out obligations on investment funds, mutual funds, alternative investment funds (AIFs), investment firms, insurance firms and brokers, and reinsurance companies to provide clients with clear advice on ESG risks and opportunities attached to their investments.

Find out more:

MiFID Delegated Regulation

Delegated Directive

AIFMD Delegated Regulation

UCITS Implementing Directive

Environmental
Governance

Corporate governance policy

Entry into force: 2 August 2022

Management companies and credit institutions

The Delegated Regulation concerns integration of sustainability factors, risks and preferences into certain organisational requirements and operating conditions for investment firms.

Environmental
Governance

Corporate governance policy

Entry into force: 2 August 2022

Any alternative investment fund.

The Delegated Regulation concerns sustainability risks and sustainability factors to be taken into account by alternative investment fund managers.

Environmental
Governance

Corporate governance policy

Entry into force: 2 August 2022

Any insurance and reinsurance undertaking.

The Delegated Regulation concerns the integration of sustainability risks into the governance of insurance and reinsurance undertakings.

The Delegated Regulation provides for the integration of sustainability risks in the prudent person principle. In particular, when dealing with risks arising from investments, insurance and reinsurance undertakings shall take into account sustainability risks. More precisely they shall take into account the potential long-term impact of their investment strategy and decisions on sustainability factors and, where relevant, that strategy and those decisions of an insurance undertaking shall reflect the sustainability preferences of its customers taken into account in the product approval process referred to in Article 4 of Commission Delegated Regulation (EU) 2017/2358 (product oversight and governance requirements for insurance undertakings and insurance distributors).

Environmental
Governance

Corporate governance policy

Entry into force: 2 August 2022

Any insurance undertaking and distributor of insurance products.

The Delegated Regulation concerns the integration of sustainability factors, sustainability risks, and sustainability preferences into product control and product governance requirements for insurance companies and distributors of insurance products and into conduct of business rules and investment advice for insurance investment products.

Environmental
Governance

Corporate governance and financial policy

Entry into force: Member States shall implement the Directive by 22 November 2022.

Any Member State

The Delegated Directive concerns the integration of sustainability factors into product governance obligations (safeguarding of financial instruments and funds belonging to clients, product governance obligations and the rules applicable to the provision or reception of fees, commissions or any monetary or non-monetary benefits).

Environmental
Governance

Corporate governance and financial policy

Entry into force: Member States shall implement the Directive by 2 August 2022

Any Member State

The Delegated Directive concerns sustainability risks and sustainability factors to be taken into account for undertakings for collective investment in transferable securities (UCITS).

In particular, management companies should, when identifying the types of conflicts of interest the existence of which may damage the interests of a UCITS, include conflicts of interest that may arise as a result of the integration of sustainability risks in their processes, systems and internal controls. Those conflicts may include conflicts arising from remuneration or personal transactions of relevant staff, conflicts of interest that could give rise to greenwashing, mis-selling or misrepresentation of investment strategies and conflicts of interests between different UCITS managed by the same management company.

Social

Social policy

Entry into force: 8 December 2020

Consolidated version adopted on 22 March 2021.

EU persons, companies incorporated or constituted under the law of an EU Member State, non-EU companies in respect of any business done in whole or in part within the EU.

In December 2020, the Council adopted the EU’s first global human rights sanctions regime. This new regime allows the EU to impose travel bans and financial sanctions on individuals, entities and bodies (including state and non-state actors) responsible for, involved in or associated with serious human rights violations and abuses worldwide, irrespective of where they occurred.

Social

Social policy

Directive entered into force on 6 June 2023 and Member States must implement within three years, by 7 June 2026

Employers in the public and private sectors

This Directive aims to improve equal pay between men and women through greater pay transparency and better access to justice in the event of unequal pay.

The Directive provides for a reporting obligation for employers with 100 or more employees on the gender pay gap between female and male workers in their organisation. Companies with more than 250 employees will be required to report annually to the relevant national authority (to be determined). For smaller organisations (initially those with over 150 employees), the reporting obligation should take place every three years.

The Directive also provides for better access to information for job applicants, workers and their representatives, a shift of the burden of proof (of equal pay) to the employer in pay discrimination cases, and an obligation for Member States to introduce effective and appropriate sanctions for non-compliance, including fines.

Social

Social Policy

In force (Member States are required to implement the Directive)

Any member State

Under the new rules, workers are, inter alia, entitled to greater predictability regarding assignments and working hours. They will also be entitled to receive timely and more complete information about essential aspects of their work, such as their place of work and pay. The new rules will particularly benefit some 2-3 million workers with precarious forms of employment.

Environmental

Law

Entry into force: from its publication at the Government Gazette on 24 January 2022 (issue A' 12) (except for article 4 of the Amending Act)

HCC's decision laying down the criteria and conditions for issuance of a no enforcement letter is expected to be issued in the future (hence applicability of art.37A depends on issuance of said HCC decision).

All companies to engage in certain multilateral (horizontal or vertical) or unilateral conduct which falls within the ambit of Greek competition rules (art. 1 and art. 2 of Greek Competition Act and/or art. 101 and art. 102 of TFEU).

Under the newly introduced art. 37A of the Greek Competition Act, the HCC Chairman, following recommendation of the Directorate General for Competition, may issue a letter to interested parties following their request, stating that no enforcement action will be taken against certain multilateral (horizontal or vertical) or unilateral conduct either because the conditions for the finding of an infringement of applicable competition rules are not met or when this is justified by reasons of public interest, such as the attainment of sustainable development goals.

Find out more:

Greek Competition Act (Law 3959/2011) -Article 37A as introduced by the Amending

Law 4886/2022 on the modernisation of competition law, amendment of l.3959/2011 and incorporation of Directive (EU) 2019/1 of the European Parliament and of the Council of 11 December 2018 to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market

Consolidated form of Greek Competition Act (Law 3959/2011) available in non-governmental source

Environmental

Law

In force

All individuals and entities producing waste - certain provisions applicable to certain industries.

  • The law, which transposes Directives 2008/98/EC and 2018/852/EU, reforms the framework for waste management in Greece by introducing a hierarchal order of waste management options prioritizing prevention, followed by reuse, recycling and recovery over disposal.

  • Under article 11 specific categories of products and waste producers (a. packaging producers as per Article 84; b. producers subject to extended producer responsibility schemes by virtue of other laws and c. Excavation, Construction and Demolition Waste Managers) are obliged to finance and participate in "Alternative Waste Management Schemes" to facilitate re-use, recycling or recovery of waste from their activities. The same producers are also under also under the obligation to register with the National Register of Producers of Packaging and other Products.

  • The law additionally sets specific rules regarding management of waste from various other activities including bio-waste (50) food waste (article 20), intensive poultry and swine farming (article 24) textile manufacturing and distribution, electrical and electronic equipment, sanitary products, footwear and books (article 19).

  • As regards hazardous waste, under Article 45 it is mandatory to label and package in the course of its collection, transport and temporary storage.

    As regards asbestos waste and other waste containing asbestos, Article 48 stipulates that landowners, tenants and companies or organisations owning or managing water supply or sewerage networks where asbestos is present are obliged to ensure or tolerate its safe collection and removal from all spaces.

Find out more:

Law 4819/2021 on Integrated framework for waste management

Consolidated form of Law 4819/2021 on Integrated framework for waste management available in non-governmental source

Environmental

Law

In force

All undertakings involved with fluorinated greenhouse gas as defined under Article 2 (30) of Regulation 517/2014

Article 11 of this law stipulates that only duly licensed and certified undertakings may purchase or sell fluorinated greenhouse gases and that all staff handling such gases shall also be duly certified.

Environmental

Law

In force

All individuals and entities

  • This Law, the main Greek environmental permitting law, provides that all projects and activities conducted in Greece, unless explicitly exempt, may only be executed if prior environmental permission has been obtained.

  • The law classifies activities and projects into three categories (A1, A2 and B) based on their environmental impact, and provides for different permit conditions and processes for each of them. Activities and projects not found in the lists follow the rules and procedures of the closest listed activity or project.
Environmental

Law

In force

All individuals and entities involved in the industrial activities of Annex I and air transport, with the exceptions listed in Annex I

The Decision, which transposes Directive 2003/87/EC, introduces the scheme for Gas Emission Allowance Trading for specific industrial and air transport activities mentioned in Annex I. The Decision requires polluters active in the aforementioned industries to hold emissions rights equal to their actual emissions as well as to hold a greenhouse emission license.

Environmental

Law

In force

All individuals and entities

  • Under Article 11 of the law, which serves as the main water protection framework in Greek law, supply and use of water, as well as the execution of water resources development projects are subject to prior permissions for any public or private entity.
  • Most importantly, the same Article grants regions of Greece the authority to impose additional conditions or controls for the issuance of the permit as well as to restrict certain uses of water or projects.
  • Additionally, by virtue of Article 7, each region of Greece issues River Basin Management Plans with which all projects and activities which may cause pollution by discharging liquid waste into the environment should be compliant.

Find out more:

Law 3199/2003 on Water protection and management

Consolidated form of Law 3199/2003 on Water protection and management available in non-governmental source

Environmental

Law

In force

All individuals and entities

  • The Environment Protection law authorizes Ministers to impose limitations on activities that may potentially degrade the quality of the atmosphere, water or land. To date, tens of ministerial decisions have regulated activities by virtue of this law. Some of the most prominent ministerial decrees include M.D. 11642/2002 for the restriction of use of genetically modified micro-organisms, M.Ds 30408/2003 and 74379/2004 for car air pollution, M.D. 33437/2008 for the Approval of the National Plan for the reduction of pollutant emissions from existing large combustion plants and M.D. 145116/2011 for re-use of treated water-waste.

  • Furthermore, article 28 provides the imposition of fines on anyone who pollutes or degrades the environment.

Find out more:

Law 1650/1986 on Environment Protection

Consolidated form of Law 1650/1986 on Environment Protection available in non-governmental source

Environmental

Law

In force

All individuals and entities

  • Forest Protection Law in principle outlaws any intervention that could be detrimental to the forest areas of Greece.

  • However, articles 45 to 61 set out a long list of exceptions and the respective conditions and rules, thus providing the main framework for economic activity in forest areas, which cover a significant part of Greece's landmass.

Find out more:

Law 998/1979 on Forest Protection

Consolidated form of Law 998/1979 on Forest Protection available in non-governmental source

Environmental

Law

In force

All establishments where dangerous substances are present except those exempt under article 2 of the Directive 2012/18/EU

  • Τhe Decision, which transposes 2012/18/EU into Greek law, requires operators of establishments where dangerous substances are present to take precautionary measures against the risk of accidents and sets penalties for non-compliance.

  • The obligations imposed by the M.D. differ based on the amount of dangerous substances present in the establishment. However, all operators are required to set out a "major-accident prevention policy" for their establishments and ensure its implementation.
Environmental

Law

In force

All individuals and entities

Article 9 regulates economic activity in the numerous "Natura 2000" areas of Greece, by prohibiting a series of activities including among others noisy and dangerous industrial installations falling under Directive 96/82/EC and "high-disturbance" installations.

Find out more:

Biodiversity conservation Law 3937/2011

Consolidated version of Law 3937/2011 on Biodiversity conservation available in non-governmental source

Environmental

Law

In force

All entities and individuals

  • The law, which transposes Directive 2010/31/EU, stipulates that all new and majorly renovated buildings, without prejudice to those expressly exempt (e.g. industrial, religious buildings), shall meet the minimum energy performance requirements set in the law and the accompanying Energy Performance of Buildings Regulation.

  • Additionally, article 9 provides that all new buildings of the wider public sector and private sector shall be "nearly zero-energy buildings"
Environmental

Law

In force

Public consultation completed - Expected to be adopted in the first half of 2022

  • The proposed law, under its current form, outlaws energy production from solid fossil fuels from 2028 onwards and mandates a 30% reduction in emissions by 2030 for projects with significant environmental impact (category A projects of law 4014/2011).
  • Moreover, it provides that from 2023, ¼ of all newly acquired or leased corporate vehicles must be electric or hybrid.
  • The law further establishes time-progressive measures to prioritize gas use over oil. As a first step, from 2023 onwards, the installation of heating oil burners is forbidden where a natural gas network is sufficiently available leading up to the complete ban on heating oil burners by 2030.
Environmental

Law

Public consultation completed - Expected to be adopted in the first half of 2022

Listed companies, credit institutions, insurance companies, investment firms, telecommunications companies, water and sewerage companies, courier companies, electricity and gas supply companies, retail chains employing more than five hundred (500) employees, logistics service provider

As of 31.03.2023, listed companies, credit institutions, insurance companies, investment firms, telecommunications companies, water and sewerage companies, courier companies, electricity and gas supply companies, retail chains employing more than five hundred (500) employees and logistics service providers are required to publish yearly reports on their carbon footprint.

Environmental

Financial reporting

Entry into force: 10 December 2019

Benchmark administrators

The Benchmark Regulations require benchmark administrators to disclose ESG factors, and include disclosure in their benchmark statement on how their methodology aligns with the target of carbon emissions reduction or attains the objectives of the Paris Agreement.

Environmental

Taxonomy, financial reporting and non-financial reporting

Applies from 1 January 2022.

The following delegated acts were approved by the Commission for scrutiny by the co-legislators:

Delegated Act on sustainable activities for climate change adaptation and mitigation objectives

Delegated act supplementing Article 8

  • Financial market participants who offer financial products and market these as environmentally sustainable
  • Organisations covered by the NFRD and SFDR

The Taxonomy Regulation sets out an EU-wide framework and classification system according to which investors and businesses can assess whether certain economic activities are environmentally sustainable.

The Taxonomy Regulation introduces amendments to disclosure requirements under SFDR and NFRD.

Environmental

Financial reporting

In force

EU Institutions and national governments.

The European Climate Law writes into law the goal set out in the European Green Deal – for Europe’s economy and society to become climate-neutral by 2050.

Environmental

Taxonomy, financial reporting and non-financial reporting

Entry into force: 29 December 2021.

Application from 1 January 2022.

  1. Financial market participants who offer financial products and market these as environmentally sustainable
  2. Organisations covered by the NFRD and SFDR

The Net Zero Investment Framework provides recommended methodologies and actions which asset owners and asset managers should utilise to assess and undertake alignment of their portfolios towards net zero, in order to maximise their contribution to the decarbonisation of the real economy. The Framework puts forward metrics to assess investments and measure alignment, and requires investors to set concrete targets at portfolio and asset level.

The key recommendations revolve around governance and strategy, portfolio reference targets, strategic asset allocation, asset class alignment, policy advocacy, and stakeholder and market engagement.

Investors are encouraged to publish information annually on how they consider their targets to be aligned to a pathway to achieve global net zero emissions by 2050, and the strategy and actions they have implemented across all asset classes, and performance against the objectives and targets over time.

Environmental

Financial reporting

Entry into force: 23 December 2020

Benchmark administrators

The three Delegated Acts required by the Low Carbon Benchmarks Regulation and adopted by the EC, set out (i) the environmental, social, and governance (ESG) disclosure requirements for benchmarks provided in accordance with the EU Benchmarks Regulation (Regulation (EU) 2016/1011), and (ii) sustainability criteria in order for a benchmark to qualify as an EU Climate Transition Benchmark or EU Paris-aligned Benchmark. Those are:

Commission Delegated Regulation (EU) 2020/1816

Commission Delegated Regulation (EU) 2020/1817

Commission Delegated Regulation (EU) 2020/1818

Environmental

Environmental policy

Entry into force : Member States shall bring into force the provisions of the Directive by 10 March 2020

Any EU Member State

This Directive presents some amendments to Directives 2010/31 and 2012/27 to better address and ensure that sustainability requirements are met in building construction activities, new building characteristics and building energy performance aspects.

Social

Law

In force

Credit Institutions

  • Under the Banking Law, the Nominations Committee of credit institutions, which is primarily responsible for identifying candidates for the board of directors, shall set to achieve a target of adequate gender representation and also draft a policy on how this target will be met.
  • In addition, each credit institution shall have in place a gender-neutral remuneration policy.
  • In relation to variable remuneration, where this is performance-related and the individual performance is assessed, non-financial criteria (such as ESG factors) are also taken into account. a natural gas network is sufficiently available leading up to the complete ban on heating oil burners by 2030.

Find out more:

Banking Law 4261/2014 (art 80 par. 5, art. 84 par. 2 (h) and art. 86 par. 1 (a))

Consolidated form of Banking Law 4261/2014 available in non-governmental source

Social

Social policy, due diligence obligation

Entry into force: 8 June 2017.

New consolidated version adopted on 19 November 2020.

Application: 1 January 2021

EU-based importers of tin, tantalum, tungsten and gold

The regulation requires EU importers of the four minerals – tin, tantalum, tungsten and gold – to ensure they use only responsible and conflict-free sources.

They need to comply with, and report on, supply chain due diligence obligations if the minerals originate (even potentially) from conflict-affected and high-risk areas.

Companies from outside the EU are also impacted as EU-companies will need to make sure they source from responsible smelters and refiners.

Environmental
Social
Governance

Law

In force

Small, medium and large undertakings, defined in the law as undertakings that on the date of their annual balance, exceed two out of the three following criteria: (i) assets of a value of €350,000; (ii) turnover of €700,000; and (iii) average personnel: 10 persons, and provided these are not public interest entities. Groups of companies.

Article 150 of Corporate Law 4548/2018 provides that, with the exception of "very small companies" (i.e. those  that, on the date of their annual balance, do not exceed two out of the three following criteria: (i) assets of a value of €350,000; (ii) turnover of €700,000; and (iii) average personnel: 10 persons, and provided these are not public interest entities) the annual management report of the Board of Directors of the relevant company should include a non-financial statement containing information relating to, inter alia, environmental and employment matters, pertaining to the specific activity carried out by the company in question.

Find out more:

Law 4548/2018 on the reformation of the legislation on societes anonymes (Corporate Law 4548/2018 - art. 150)

Consolidated form of Corporate Law 4548/2018 available in non-governmental source

Environmental
Social
Governance

Law

In force

 Large, public interest undertakings defined in the law as listed companies, credit institutions, insurance and reinsurance companies and other entities which are characterized as public interest entities by provision of sectoral law, which, on the date of their annual balance sheet, have an average of more than 500 employees during the relevant fiscal year.

Article 151 of Corporate Law 4548/2018 provides that large undertakings, which are public interest entities (i.e. listed companies, credit institutions, insurance and reinsurance companies and other entities which are characterized as public interest entities by provision of sectoral law) and which, on the date of their annual balance sheet, have an average of more than 500 employees during the relevant fiscal year, are obliged to include in the annual management report of their Board of Directors a non-financial statement containing information relating to, inter alia, the impact of such companies  to environmental, social and employee matters, respect for human rights, anti-corruption and bribery matters.

The above non-financial statement should include the following:

  1. a short description of the company's business model;
  2. a description of the policies implemented by the company in relation to the above matters, including due diligence procedures;
  3. the results of the above policies;
  4. the basis risks pertaining to the above matters and connected to the company's activity;
  5. non-financial KPIs related to the specific industry.

The above obligation applies also to the consolidated financial statements of public interest entities which are large group parent companies.

Find out more:

Corporate Law 4548/2018 (art. 151)

Consolidated form of Corporate Law 4548/2018 available in non-governmental source

Social
Governance

Law

In force

Listed undertakings

  • Listed companies are obliged to include in the annual management report of their Board of Directors a corporate governance statement.
  • Such statement should, inter alia, include a description of the (i) the corporate governance code adopted by the company, (ii) any other corporate governance measures implemented by the company, (iii) the suitability policy of the members of the board of Directors, with particular reference to the diversity policy (which may be a part thereof or a separate policy) which the company implements with regard to its administrative, management and supervisory bodies, including but not limited to, in relation to the age, sex and educational and professional background of their members. The suitability policy of the members of the board of directors shall, inter alia, set a threshold for adequate gender representation, which may not be lower than 25%. Lastly, reference to the targets of the diversity policy, the manner of its implementation as well as the results thereof should be included in the above statement.

Find out more:

Corporate Law 4548/2018 (art. 152) & 

Corporate Governance Law (art. 18 par. 3)

Consolidated form of Corporate Law 4548/2018 available in non-governmental source

Consolidated form of the Corporate Governance Law available in non-governmental source

Environmental
Social
Governance

Prudential measures

Entry into force: 30 December 2019

Institutions subject to supervision by the EBA, EIOPA and ESMA

The Omnibus Regulation establishes ESG-related factors as part of the EBA, EIOPA and ESMA’s "scope of action" and assigns each with the task of monitoring and assessing ESG-related developments in their areas of competence.

The Omnibus Regulation also modifies Article 23 (1) of each regulation, requiring each authority to develop criteria for the identification and measurement of systemic risk, including environmental risks, and Article 29 (1) of each regulation, requiring each authority to put in place a monitoring system to assess material ESG-related risks, taking into account the Paris Agreement.

Environmental
Social
Governance

Prudential measures

Credit institutions and investment firms

Article 98(8) of Directive 2013/36/EU (“CRD IV”) and Article 35 of Directive (EU) 2019/2034 (“IFD”) requires the EBA to develop a report providing uniform definitions of ESG risks, and appropriate qualitative and quantitative criteria for the assessment of the impact of ESG risks on the financial stability of institutions in the short, medium and long term. They also mandate the EBA to assess whether to include ESG risks in its annual prudential supervisory review and evaluation process undertaken by Member State prudential regulators (“SREP”).

Environmental

Prudential measures

In progress

Report on Environmental, Social and Governance (ESG) risks management and supervision published on 24 October 2022

Credit institutions and investment firms

In June 2021, the EBA published a Report on the management and supervision of ESG risks for credit institutions and investment firms in accordance with Article 98(8) of Directive 2013/36/EU (Capital Requirements Directive - CRD) and Article 35 Directive (EU) 2019/2034 (Investment Firms Directive - IFD).

Following the publication of the EBA Guidelines on SREP for investment firms, the Report published on 24 Oct 2022 fulfils the mandate under point (d) of Article 35 of the IFD and complements the Report on the management and supervision of ESG risks for credit institutions and investment firms, published in June 2021.

Point (d) of Article 35 of IFD mandates the EBA to develop a report providing the criteria, parameters and metrics by means of which supervisors and investment firms can assess the impact of short, medium and long-term ESG risks for the purposes of the supervisory review and evaluation process. The Report has been transmitted to the EU Parliament, the Council and the European Commission.

Environmental
Social
Governance

Non-financial reporting

The CSRD entered into force on January 5, 2023.

The rules will start applying between 2024 and 2028 in the following increments:

  • For the year commencing 1 January 2024: Large public-interest companies (with over 500 employees) already subject to the non-financial reporting directive, with the relevant reports due in 2025;
  • For the year commencing 1 January 2025:  Large companies that are not presently subject to the non-financial reporting directive (with more than 250 employees and/or €40 million in turnover and/or €20 million in total assets), with the relevant reports due in 2026;
  • For the year commencing 1 January 2026:  Listed small and medium sized enterprises (SMEs) and other undertakings (small and non-complex credit institutions and captive insurance undertakings), with the relevant reports due in 2027. SMEs can opt-out until 2028.
  • For the year commencing 1 January 2028:  Non-EU companies with net sales in the EU of more than EUR 150 million and at least one subsidiary or  branch in the EU, with the relevant reports due in 2029

Listed companies, and large companies in particular.

The CSRD is a flagship piece of legislation that, once brought into national law, will impose tighter reporting standards and   obligations on in scope companies in relation to their disclosure of pertinent sustainability information.

The CSRD replaces the Non Financial Reporting Directive (NFRD), and is aimed at, amongst other things, addressing shortcomings in the existing legislation, and expanding the scope of the disclosure required by the relevant entities.

The CSRD introduces more detailed reporting requirements in relation to companies’ environmental, social,  and human rights impacts.  The stated aim of the legislation is to “modernise and strengthen the rules concerning the social and environmental information that companies have to report ….. to ensure that investors and other stakeholders have access to the information they need to assess the impact of companies on people and the environment and for investors to assess financial risks and opportunities arising from climate change and other sustainability issues.”

To ensure the relevant companies are providing reliable information, they will be subject to independent auditing and certification. The legislation aims to put financial and sustainability reporting on equal footings, and give investors access to similarly granular sustainability data as they would have financial information.  

The reporting standards required are enshrined in the European Sustainability Reporting Standards (ESRS), which the European commission adopted on 31 July 2023. A detailed article on the ESRS can be found here.

Transposition Status

For a summary of the transposition status of the CSRD, please see the Hogan Lovells CSRD Transposition tracker here . The EU also publishes a list of member states who have transposed the CSRD into national law, as well as links to the underlying legislation (see here).

The European Commission recently published a number of draft FAQs (see here) clarifying the scope of the CSRD, amongst other regulations. See these useful articles “Three months on from the CSRD transposition deadline – where are we now” and “European Commission publishes draft FAQs on EU Corporate Sustainability Reporting Directive (CSRD)” for more information.

Environmental
Social
Governance

Corporate governance policy and financial and non-financial disclosures

In force since 2013

New consolidated version adopted on 30 September 2021.

Large institutions with securities traded on a regulated market of any EU Member State

Regulation (EU) 2019/876 amending Capital Requirements Regulation includes under article 449a the requirement to disclose prudential information on environmental, social and governance risks, including transition and physical risk, addressed to large institutions with securities traded on a regulated market of any Member State. These disclosure requirements are applicable from June 2022 on an annual basis during the first year and biannually thereinafter. 

Environmental

Non-financial reporting

Voluntary standards

Financial institutions such as pension funds and asset managers

The Net Zero Investment Framework provides recommended methodologies and actions which asset owners and asset managers should utilise to assess and undertake alignment of their portfolios towards net zero, in order to maximise their contribution to the decarbonisation of the real economy. The Framework puts forward metrics to assess investments and measure alignment, and requires investors to set concrete targets at portfolio and asset level.

The key recommendations revolve around governance and strategy, portfolio reference targets, strategic asset allocation, asset class alignment, policy advocacy, and stakeholder and market engagement.

Investors are encouraged to publish information annually on how they consider their targets to be aligned to a pathway to achieve global net zero emissions by 2050, and the strategy and actions they have implemented across all asset classes, and performance against the objectives and targets over time.

Governance

Financial and non-financial reporting

Voluntary standards

Asset managers

The code focuses on socially responsible investment (SRI) funds distributed publicly in Europe and has been designed to cover a range of assets classes, such as equity and fixed income.

The principle driving the Code is that asset manager signatories should be open and honest, and disclose accurate, adequate and timely information to enable stakeholders, in particular retail investors, to understand the policies and practices of a given SRI fund.

 

Signatories need to make several commitments such as respecting the order and exact wording of the questions of the code, updating responses at least on an annual basis, and making the responses to the code easily accessible from the fund’s and/or fund manager’s website.

Environmental

Sustainability standards

Voluntary standards

All companies

The Commission adopted on March 2022 draft revised Guidelines on the assessment of Horizontal Agreements. Such guidelines will enter into force on 1 January 2023. Chapter 9 of the guidelines concerns “sustainability agreements”. According to chapter 9, agreements which meet certain standards of sustainability can outbalance negative effects under a competition standpoint and can thus be exempted from the application of competition rules.

Governance

Corporate Governance

In force

EU financial services firms

The EU has introduced amendments to various Delegated Acts (see link) which will integrate sustainability issues into a number of key financial services Directives.

Entities will be:

  • Required to integrate sustainability factors into their assessment of client suitability for certain financial products and when undertaking product approval of instruments.
  • Subject to new obligations to integrate sustainability risks into risk management and conflict procedures
  • Subject to new fiduciary duties, making sure that they encompass sustainability risks such as the impact of climate change.
     
Governance

Support of SMEs and organisations projects

Entry into force: 26 March 2021.

Application: 1 January 2021

EU SMEs and organisations with difficulties when accessing finance because of their perceived high risk (in particular after COVID-19 crisis).

This Regulation establishes the InvestEU Fund, which shall provide for an EU guarantee to support financing and investment operations carried out by the implementing partners that contribute to objectives of the Union’s internal policies. The Regulation also establishes an advisory support mechanism to provide support for the development of investable projects and access to financing and to provide related capacity building assistance.

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