Closing the Gap with Western Counterparts: Sustainability Reporting Under the New Regulatory Regime in Central and Eastern Europe

This commentary examines the ‘sustainability reporting gap’ between Central and Eastern Europe (CEE) and Western Europe, identifies challenges posed by the new regulatory regime, in particular the Corporate Sustainability Reporting Directive (CSRD), and proposes research pathways to enhance sustainability reporting practices in the region. Adopting a descriptive approach, the commentary draws on scientific and gray literature to outline the ‘sustainability gap’, explain its causes, and outline the evolution of sustainability reporting in CEE. It assesses the current state of CSRD implementation, explores key challenges, and suggests research directions to bridge the gap. By doing so, it aims to encourage researchers, including those from the CEE, to provide insights that can support practitioners and regulators in improving sustainability reporting practices in the region and beyond. As discussed in this commentary, the gap between CEE and Western Europe stems from factors such as socialist legacy, high levels of fraud and corruption, unresolved environmental and social issues, cultural context, and the limited roles of non-governmental organizations (NGOs) and governments in sustainability matters. The CSRD introduction, representing the fourth phase in the development of sustainability reporting in CEE, has the potential to transform the region's approach to sustainability but also introduces significant challenges.