Sustainability and Competition Global Practice Guide |
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Bulgaria |
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| (Europe) Firm Penkov, Markov & Partners Updated 06 Sep 2022 | |
| Are ESG measures/sustainability agreements included in your jurisdictional competition regime? | No specific legal provisions in the competition regime regulating the application of ESG measures/sustainability agreements have been introduced in Bulgaria. Based on the ESG regulation at the EU level, however, for the time being, such actions are undertaken on a voluntary basis and are tending to be included in the internal rules and policies of the respective company. For exhaustiveness, it should be noted that Bulgarian corporate law requires that the directors of Bulgarian joint-stock companies should perform their functions by adhering to the so-called “duty of diligent care” standard of prudent managers and always act in the interest of the company and its shareholders. If a director fails to comply, he/she could be held liable for any damages caused to the company. Due to the lack of specifically triggered ESG legislation, the required duty of care standard is not easily recognized towards compliance with material ESG factors. However, in our opinion, ESG could be related to the duty of care standard for directors only if it can be demonstrated that integrating ESG factors at an additional cost creates a long-term value for the business while adhering to the applicable social and environmental legislation in a sustainable manner. Although Bulgarian law is not quite specific on the scope of a director’s duty of care (except for the public undertakings), in our opinion, it can be assumed that any risk management activity that maximizes shareholder value will be consistent with the duty of care standard. If ESG factors are incorporated with the goal to mitigate or eliminate these risks, ESG integration would in this case be in line with the duty of care standard. |
| If ESG measures/sustainability agreements are not included in your jurisdictional competition regime, do you foresee any new regulations coming into place in 2022? | For the time being, we do not expect the adoption of specific local legal regulations with respect to ESG measures and sustainability agreements at least until the end of the year. |
| Has your Authority issued any guidance on the role, if any, of ESG in the competition law analysis applied to mergers or other conduct? | The Bulgarian Competition Protection Commission has not issued any guidance on the role of ESG in the competition law analysis applied to mergers or other conduct. |
| Has your jurisdiction issued guidance regarding competitor collaborations or participating in industry working groups, and if so, do they specifically address ESG? | No specific guidance has been issued in Bulgaria regarding competitor collaborations or participating in industry working groups. |
| Can parties seek specific guidance from authorities on proposed ESG initiatives? | Considering the lack of specific local legal regulation of ESG measures, for the time being, currently, in Bulgaria any proposed ESG initiative is not subject to assessment/guidance from the authorities. |
| How, if at all, does your jurisdiction quantify or calculate the ESG effects? | Currently, there are no standardized criteria for quantifying or calculating ESG effects in Bulgaria. |
| What does your legal authority currently permit even if your agency is not yet active on this topic? | With respect to merger competition protection, ESG measures and sustainability agreements are not currently supervised by the competition authority in Bulgaria. |
| Are there precedents that involved ESG/sustainability matters in your country? If so please provide a short description. | We are not aware of precedents that involve ESG/sustainability matters in Bulgaria. |
| Is there specific antitrust regulation in your jurisdiction to be aware of which might give rise to private or class action ESG litigation? | No. |
Sustainability and Competition Global Practice Guide
No specific legal provisions in the competition regime regulating the application of ESG measures/sustainability agreements have been introduced in Bulgaria.
Based on the ESG regulation at the EU level, however, for the time being, such actions are undertaken on a voluntary basis and are tending to be included in the internal rules and policies of the respective company.
For exhaustiveness, it should be noted that Bulgarian corporate law requires that the directors of Bulgarian joint-stock companies should perform their functions by adhering to the so-called “duty of diligent care” standard of prudent managers and always act in the interest of the company and its shareholders. If a director fails to comply, he/she could be held liable for any damages caused to the company.
Due to the lack of specifically triggered ESG legislation, the required duty of care standard is not easily recognized towards compliance with material ESG factors. However, in our opinion, ESG could be related to the duty of care standard for directors only if it can be demonstrated that integrating ESG factors at an additional cost creates a long-term value for the business while adhering to the applicable social and environmental legislation in a sustainable manner.
Although Bulgarian law is not quite specific on the scope of a director’s duty of care (except for the public undertakings), in our opinion, it can be assumed that any risk management activity that maximizes shareholder value will be consistent with the duty of care standard. If ESG factors are incorporated with the goal to mitigate or eliminate these risks, ESG integration would in this case be in line with the duty of care standard.
For the time being, we do not expect the adoption of specific local legal regulations with respect to ESG measures and sustainability agreements at least until the end of the year.
The Bulgarian Competition Protection Commission has not issued any guidance on the role of ESG in the competition law analysis applied to mergers or other conduct.
No specific guidance has been issued in Bulgaria regarding competitor collaborations or participating in industry working groups.
Considering the lack of specific local legal regulation of ESG measures, for the time being, currently, in Bulgaria any proposed ESG initiative is not subject to assessment/guidance from the authorities.
Currently, there are no standardized criteria for quantifying or calculating ESG effects in Bulgaria.
With respect to merger competition protection, ESG measures and sustainability agreements are not currently supervised by the competition authority in Bulgaria.
We are not aware of precedents that involve ESG/sustainability matters in Bulgaria.
No.