Introduction to EU ESG Rules

Over the past five years, the European Union has made a clear strategic decision: to transform sustainability from a voluntary corporate practice into a structural pillar of the economy and a minimum operating requirement for large and medium-sized European businesses. This shift has been driven primarily through regulations such as the CSRD, CSDDD, and the EU Taxonomy.

Recent changes and simplifications to this regulatory framework acknowledge an important reality. While the objectives of these legislations are directionally correct, businesses needed simpler processes and more time to integrate them into daily operations. However, in the Greek market, these adjustments have often been misinterpreted. Instead of being seen as a clarification and facilitation of implementation, they have conveyed a misleading sense of regulatory “relaxation”, despite the fact that the substance of the ESG obligations remains largely unchanged.

How Many Greek Businesses Will Be Affected

More than 1,500 Greek companies will be directly and, more importantly, indirectly required to adopt sustainable practices and ESG policies in the coming years, up to 2028.

For example, a small or medium-sized enterprise with 50 employees that forms part of the supply chain of a large Greek supermarket group will be required to comply with ESG criteria under the Corporate Sustainability Due Diligence Directive (CSDDD). The same applies to a mid-sized tourism company whose clients include European tour operators.

In practice, ESG obligations increasingly extend through value chains, regardless of company size or formal inclusion in the legislation.

CSRD and the New Reporting Reality in Greece

At the same time, under the revised CSRD “Stop the Clock” directive, which has already been incorporated into Greek law since November 2025, large Greek companies must comply with the new sustainability reporting requirements.

This obligation does not apply only to large groups and listed companies. It also includes subsidiaries of foreign companies operating in Greece. For many of these organizations, the requirement for structured and auditable ESG data translates into investments in internal processes, digital tools, and staff training.

Sustainability reporting is no longer a communications exercise. It is becoming a core operational function.

The Most Substantial Change: ESG Due Diligence in Supply Chains

The most impactful shift, however, comes from the CSDDD, which introduces a clear legal obligation for companies to identify, assess, and manage environmental and social risks across their supply chains.

This includes direct suppliers, subcontractors, and overseas subsidiaries. In practical terms, even smaller Greek companies that supply products or services to larger European businesses will soon find themselves subject to ESG scrutiny, even if they are not directly covered by the directive, which formally targets very large European enterprises.

What These Changes Mean in Practice

In real terms, the new EU ESG rules require a deep operational transformation for Greek businesses.

This includes:

• Systematic ESG data collection

• Structured risk assessments

• The setting of measurable ESG targets

• A broader modernization of business operations

At the same time, training executives and managers on ESG topics, whether through internal programs or specialized certifications, becomes a critical success factor for a smooth transition.

ESG and Access to Finance

The impact on Greek businesses does not stop at regulatory compliance. Financing is also affected.

Banks increasingly apply sustainability criteria when assessing companies for funding. As a result, businesses that cannot present credible ESG data may face less favorable financing terms or increased scrutiny. ESG performance is rapidly becoming a component of financial risk assessment.

Three Priorities for Greek SMEs

Within this context, small and medium-sized Greek B2B companies should focus on three core priorities:

1. Assessing their current ESG position, in order to understand where they stand and what needs to change.

2. Integrating ESG criteria into business strategy and operations, rather than treating sustainability as a standalone function.

3. Preparing a sustainability report under the new European VSME framework, while investing consistently in ESG education for their teams.

Why ESG Is an Opportunity for Greek Businesses

In an economy like Greece’s, where SMEs dominate, these new obligations should not be viewed merely as a compliance burden or a risk mitigation exercise. They represent an opportunity to enhance competitiveness and business value, in much the same way that cybersecurity requirements have done in recent years.

Greece already has companies that lead in sustainability practices. The real challenge now is extending these practices to small and medium-sized enterprises, ensuring they remain competitive, resilient, and sustainable in the years ahead.

FAQs

What are EU ESG rules in simple terms?
They are mandatory European regulations that require businesses to manage and disclose their environmental, social, and governance impacts.

Will small Greek companies be affected?
Yes. Even if not directly covered, many SMEs are affected through supply chains, clients, and financing requirements.

Are EU ESG rules only about reporting?
No. Reporting is the outcome. The real focus is on risk management, governance, and operational transformation.

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