From Disclosure to Scrutiny: A Turning Point for the SEE Energy Sector
The first cycle of Corporate Sustainability Reporting Directive (CSRD) implementation has exposed a critical reality across South-East Europe (SEE): while alignment with EU sustainability objectives is widely acknowledged, operational readiness remains uneven. For energy companies in Romania, Greece, Bulgaria, Cyprus and Moldova, the first half of 2026 has been less about strategy and more about testing the ability to produce reliable and auditable ESG information. As we move into the second half of the year, the focus shifts decisively from disclosure to credibility under scrutiny—from auditors, regulators and capital providers.
1H 2026: What CSRD Has Revealed in SEE
Compared to Western Europe, companies in SEE face additional complexity, including fragmented IT systems, limited historical ESG data, reliance on manual processes and evolving local regulatory interpretations. These structural constraints result in inconsistent data quality, challenges in consolidating ESG information and misalignment between local and group reporting expectations. In the energy sector, transition pressures further amplify these issues, given high capital intensity, exposure to climate risks and rapid renewable development.
Why H2 2026 Is Critical for Audit Committees
The second half of 2026 represents a structural shift. Sustainability reporting is now subject to assurance discipline, requiring robust internal controls and clear audit trails. At the same time, investors are increasingly using CSRD disclosures to assess transition credibility, focusing on alignment between targets and capital allocation. As disclosures become comparable, inconsistencies are no longer internal issues but visible risks affecting reputation and financing.
Key Challenges for Audit Committees in SEE
Audit Committees face several pressing challenges. Data reliability across multi-entity operations remains a primary concern, particularly given varying local maturity levels. Scope 3 emissions reporting continues to rely heavily on estimates and proxies. Alignment between ESG disclosures and financial statements is still developing, especially regarding asset valuation, impairment assumptions and capital expenditure. Governance challenges persist, including unclear ownership of ESG data and insufficient integration with finance functions. Finally, many organisations remain underprepared for assurance, lacking proper documentation and testable processes.
CSRD and Investment Dynamics in SEE
The SEE region is central to Europe’s energy transition, offering significant renewable potential but also requiring substantial infrastructure and capital investment. Access to financing is increasingly dependent on ESG credibility, transparency and consistency. As a result, CSRD is becoming a prerequisite for investment, with higher-quality disclosures directly influencing access to capital and cost of funding.
Baker Tilly Perspective: From Compliance to Defensibility
From our experience across the region, the primary risk is not non-compliance but lack of defensibility. While many organisations are able to produce CSRD reports, fewer can support them under audit scrutiny or investor review. The next phase of CSRD implementation will therefore focus on strengthening governance, improving data reliability and ensuring alignment between sustainability and financial reporting.
How We Support Audit Committees and Energy Companies
We support organisations through CSRD readiness assessments, ESG control framework design and assurance preparation. Our approach focuses on identifying critical gaps, enhancing governance structures and ensuring that sustainability disclosures are aligned with financial reporting and audit requirements. We also work directly with Audit Committees to strengthen oversight capabilities, enabling more effective challenge of management assumptions and improved readiness for assurance.
Conclusion: The Audit Committee Agenda for H2 2026
For Audit Committees in the SEE energy sector, priorities must shift from reviewing disclosures to challenging assumptions, ensuring consistency and validating the robustness of systems and controls. In H2 2026, success will be defined not by the comprehensiveness of reporting, but by its credibility, auditability and alignment with strategic and financial reality.
