CSRD implementation: German government publishes new draft bill

published on 14 July 2025 | reading time approx. 2 minutes

The transposition of the Corporate Sustainability Reporting Directive (CSRD) into German law had been quiet for a long time – not least due to the change of government and the regulatory uncertainties in connection with the Omnibus Initiative. On 10 July 2025, the Federal Ministry of Justice and Consumer Protection (BMJV) published the draft bill for the implementation of Directive (EU) 2022/2464 (CSRD). Like the previous government's draft bill and government draft, this provides for implementation of the CSRD in accordance with the 1:1 principle. It also takes into account the developments within the Omnibus Initiative.

What developments preceded the publication of the draft bill?

As an EU directive, the CSRD must be transposed into national law by the member states in order to be valid. The deadline for this set out in the CSRD had already expired on 6 July 2024. As implementation in Germany and some other EU member states did not take place on time, infringement proceedings were initiated against the states concerned in October 2024.

Although Germany was already in the implementation process at this time – the draft bill was published in March 2024 and finally the government bill in July 2024 – no agreement could be reached by 31 December 2024. For this reason, the predecessor directive, the Non-Financial Reporting Directive (NFRD), remained valid for the 2024 financial year.

According to the principle of discontinuity, the bill from the previous legislative period has lapsed. The Federal Government is therefore obliged to reintroduce it. In the draft bill, the BMJV emphasizes that the Federal Government would now like to fulfil its obligation to introduce sustainability reporting as quickly as possible in light of the expired deadline.

How is the CSRD to be implemented according to the new draft bill?

The content of the draft bill is largely based on the previous government's bill and basically provides for the CSRD to be implemented on a 1:1 basis.

However, the member states are granted options in some points in the CSRD. Like the previous draft, the new draft bill also stipulates, for example, that in Germany only other auditors in addition to the statutory auditor are to be authorized to audit sustainability reporting.

How does the Omnibus Initiative influence the draft bill?

The regulatory developments surrounding the Omnibus Initiative are reflected in the following two regulations in the draft bill:

Implementation of the “Stop the Clock“ Directive

The ‘Stop the Clock’ Directive (EU) 2025/794 adopted in April 2024, which postpones the dates for the first-time application of the CSRD for waves 2 and 3 (large companies and capital market-oriented SMEs) by two years in each case (i.e. to the 2027 and 2028 financial years), is already taken into account in the draft bill. This directive must be officially implemented by the member states by 31 December 2025.

Exemption from the reporting for ceratin wave 1 companies

The German government also expressly supports the proposals made as part of the Omnibus Initiative to simplify sustainability reporting, including by restricting the group of users. The draft of the corresponding amending directive COM(2025) 81 is currently still in the legislative process at EU level. In February 2025, the EU Commission proposed raising the threshold above which a company is obliged to report on sustainability to 1,000 employees.

Transposing the group of users currently envisaged in the CSRD into German law would mean that capital market-oriented companies with 500 to 1,000 employees (wave 1) would be required to report for the 2025 financial year – even if they would be completely excluded from the group of users in future if the threshold of 1,000 employees currently being discussed at EU level were to be adopted. As this reporting obligation is considered disproportionate for what is likely to be a very short period of time, the draft bill contains a special regulation for these companies to exempt them from reporting for the 2025 and 2026 financial years. The BMJV estimates that this regulation will affect around 50 companies in Germany.

What happens next?

The BMJV has asked the federal states, associations and other interested parties to comment on the draft bill by 21 July 2025. A government draft will then be prepared on the basis of this, which must be approved by the Federal Cabinet and submitted to the Federal Council. It remains to be seen whether there will be any significant changes to the content of the bill during the legislative process.