As table.media reports, the implementation of the Corporate Sustainability Reporting Directive (CSRD) in Germany continues to be delayed, which presents companies with considerable uncertainty. The directive, which will apply throughout the EU from 1 January 2025, initially obliges around 300 German companies with more than 500 employees to report on sustainability. It will later be extended to around 15,000 companies.
Delays and changes
- Political blockade: The implementation of the CSRD initially stalled in the Federal Ministry of Justice. Following the break-up of the "traffic light" coalition, it is unclear whether the law will be passed before the general election.
- Changes to the draft: SPD and Greens have decided to make adjustments, including
- Authorisation of technical experts (e.g. TÜV) for tests.
- Two-year deadline extension for adaptation to the digital format ESEF (European Single Electronic Format).
- Longer transition periods for public companies.
- Challenges: The government needs the support of the Christian Democratic Union Party (CDU) to pass the legislation, but the CDU has expressed concerns about bureaucracy. Without an agreement, there is a risk that implementation will not be postponed until autumn 2025. In addition, the German government must answer the EU Commission this week at the latest as to why the CSRD is still being delayed. The Commission had opened CSRD proceedings against Germany due to the expired CSRD implementation deadline.
Consequences for companies
- Companies in Germany have to work with pragmatic solutions, while the directive already applies in other EU countries, such as France.
- The lack of national implementation prevents the use of group exemptions for subsidiaries abroad, for example.
Legal situation
- According to a report by the Institute of Public Auditors in Germany (IDW), the old legal framework (Non-Financial Reporting Directive, NFRD) remains valid for the time being. Companies would have to submit a non-financial statement for the 2024 financial year, but would not have to carry out external audits.
- The application of the more extensive CSRD criteria would be voluntary.
- There is uncertainty as to whether CSRD can be applied retrospectively to completed or current financial years.
Conclusion: The delays are causing legal and operational uncertainties, which are affecting internationally operating companies in particular. The German government is under pressure to present a solution to the EU Commission soon.
Is your company affected by the CSRD? Take action now! Christopher Blauth and Jens Haasler will be happy to answer your questions at beratung@trade-e-bility.de.
