The PRII team headed to Norway to assess the approach to ESG initiatives and ESG reporting in one of the leading countries regarding sustainability. The primary goal was to collect data to create a methodology assessing ESG compliance in the CEE region. In order to find the best practices and initiatives on ESG the PRII team met with representatives from both the private and the public sector. Their presentations and discussions led to a thorough analysis of the ESG trends in Norway, the potential threats and opportunities stemming from ESG reporting, and crucially, the expectations about ESG reporting becoming a more widely discussed topic in the CEE region.
One of our crucial takeaways was noting the level of cultural preparedness and openness of the Norwegian society towards initiatives on sustainability which create a fertile ground for further ESG initiatives. A pivotal document for ESG reporting is the EU´s Corporate Sustainability Reporting Directive which sets the reporting agenda for the coming years. The initial ESG reporting period will primarily concern larger corporations that are already more accustomed to dealing with sustainability initiatives, and the expectation is that these companies will be the fastest to adapt. However, since the overwhelming majority of Norwegian companies are small and medium enterprises (SMEs), they are expected to report their ESG data only from 2026. Hence, a relative “calm before the storm” is characteristic of the local views on ESG reporting, especially from the SMEs which are primarily seeing the threats rather than the opportunities.
A key aspect of the ESG debate was the looming threat of increased costs expected due to the additional administrative workload. Despite this, the prediction based on the debates with the private sector was that once the larger companies prioritise ESG-compliant firms for cooperation, the discussion and the overall trend will shift to the opportunities from ESGs. Crucially, the current outlook considers the Environmental aspect of the ESG as a priority, while the Social and Governance are currently rather limited in the initiatives.
For PRII, the Norwegian ESG trends highlighted the importance of the discussion on ESG reporting, which is expected to be vastly different in the CEE region. This is primarily due to some cultural differences and the perception that ESG reporting requirements are a top-down initiative increasing operational costs, rather than creating new business opportunities. Hence, approaching the discussion on ESG by highlighting the opportunities will be vital, especially in the CEE region.
Similarly, since sustainability is a topic getting increased recognition, for PRII it was also important to recognise the added value of the initiatives focusing on the Social and Governance aspects. These parts are also where the practices of PRII are likely to add the greatest value. Going forward, similarly to the trend in Norway, PRII expects the larger companies that will have to report on their ESG compliance first to become the leaders and steer the discussion in the CEE region. The financial incentives that prioritise ESG-compliant firms are likely to be crucial in the future with a consequent effect on the SMEs that also prioritise ESG in their daily operations.
Based on these key takeaways, PRII will focus on shaping the debate on ESGs regionally with a focus on the opportunities. Taking into account the trends in Norway in conjunction with the established best practices, PRII will have an important role in bringing experts to the ESG debate and creating the most effective methodology for assessing the ESG compliance of the companies in the CEE region.
This project is financed by EEA Norway Grants.
