Ukrainian companies will be required to report on their environmental and social impact: The Ministry of Finance is preparing a new law
27 June 2025 21:41
The Ministry of Finance of Ukraine has developed a draft law that introduces new corporate reporting standards in Ukraine in line with European standards. It is about the mandatory reporting of enterprises on sustainable development issues: ecology, social impact, and corporate governance, "Komersant Ukrainian" reports with reference to draft law No. 13425.
This is the draft law on amendments to the Law of Ukraine “On Accounting and Financial Reporting in Ukraine” on the introduction of sustainable development reporting, which was submitted to the Parliament on June 26, 2025, by the initiator, Prime Minister Denys Shmyhal. As of today, June 27, the document has already been reviewed by the relevant committee.
What happened
Based on the Association Agreement with the EU, Ukraine has committed itself to gradually adapting European legislation in the field of financial and non-financial reporting. In 2022-2023, the EU updated the relevant directives, in particular on Corporate Sustainability Reporting Directive (CSRD) and criteria for determining the types of companies by size.
In response, the Ukrainian government approved the Strategy for the Implementation of Sustainability Reporting for 2024-2026. The document was approved by the Cabinet of Ministers in October 2024, and the operational implementation plan provides for responsible steps by the Ministry of Finance, including the development of a legislative framework.
What does the future law provide for
Introduction of uniform rules for the preparation of sustainability reports. Companies will be obliged to report annually not only on their finances but also on the impact of their activities on the environment, employees and society.
It will be mandatory for companies, including those with a state share, to publish such reports.
Approximation of Ukrainian standards to EU norms, which will allow businesses to better integrate into European markets.
Updating the criteria for dividing companies into small, medium, and large ones. State-owned unitary enterprises and companies in which the state owns more than 50% of the authorized capital will be required to keep accounting records in accordance with international standards. They will also have to publish a management report. This will make it possible to determine more precisely which reports should be submitted by different companies.
Why this is important
In addition to EU commitments, the changes are in line with the State Property Policy approved by the Cabinet of Ministers in November 2024. This policy envisages transparent management of state-owned enterprises and clearer rules on why and which companies remain in state ownership.
The new law also takes into account the legislative work plans of the Verkhovna Rada and the government’s priority actions for 2025.
In addition, as Denys Shmyhal emphasizes in the explanatory note to the draft law, the changes will help
- fulfill obligations to the European Union under the Association Agreement;
- harmonize Ukrainian legislation with the European one;
- make financial and non-financial reporting more transparent;
- improve the investment climate in Ukraine.
The Government also assures that there will be no negative impact on business, citizens or the state. In addition, the future law will not affect regional development, jobs, public health or the environment.
The changes will only affect companies that prepare or have to prepare reports and will provide them with clear, uniform “rules of the game.”
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