Application of ESG standards in labor relations in the Republic of Serbia

ESG standards (Environmental, Social and Governance) represent a modern concept of sustainable and responsible business, which is increasingly reflected in labor relations throughout Europe, including in the Republic of Serbia. Although Serbia still does not have a single law or strategy that would systematically regulate the ESG obligations of business entities, labor legislation contains most elements of the social dimension of ESG, while certain segments of the governance (G) and environmental (E) components are reflected indirectly through other regulatory areas. In this regard, domestic labor law demonstrates a high degree of normative readiness for the integration of modern ESG principles, particularly in the areas of occupational safety and health, prohibition of discrimination, trade union rights, and transparency. The aim of this paper is to provide a comprehensive analysis of the existing legislative framework of the Republic of Serbia relevant to the application of ESG standards in labor relations. Special attention is devoted to the review of judicial practice, which significantly contributes to the operationalisation of ESG principles, especially in cases of discrimination, workplace harassment, violations of occupational safety and health regulations, abuse of corporate powers, and whistleblower protection. The paper also discusses the indirect influence of European regulations, primarily the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), which, although not formally binding on Serbia, have a significant impact through the operations of foreign investors and affiliated companies. It is concluded that expectations regarding ESG standards in labor relations will inevitably increase, and that it is necessary to further strengthen institutional capacities, improve labor inspection oversight, and develop corporate policies that promote a sustainable working environment.