Sustainability Reporting: Publication of the ministerial draft on the German implementation of the CSRD

published on 22 March 2024 | Reading time approx. 2 minutes

It had been announced for a long time, but now it is finally here: on March 22, 2024, the Federal Ministry of Justice published the draft bill for the German implementation of the Corporate Sustainability Reporting Directive (CSRD). The publication was preceded by several months of internal departmental coordination.

As the successor to the Non-Financial Reporting Directive (NFRD) and the German implementation in the form of the CSR Directive Implementation Act (CSR-RUG), the CSRD essentially aims to significantly expand the content of corporate reporting on non-financial aspects from the areas of environment, social and governance (ESG) and to improve their quality and comparability through the mandatory use of uniform European sustainability reporting standards (ESRS).

While the CSRD itself officially came into force in January 2023 and is already to be applied by the first companies in the current 2024 financial year, the member states have been given 18 months to implement the EU directive at national level. Agreement on the published draft must therefore be reached by July 6, 2024, at the latest.

In principle, when implementing EU directives such as the CSRD, member states are obliged to adopt national measures in order to achieve the objectives prescribed by the directive. In practice, this means that the sustainability reporting requirements set out in the CSRD must be fully implemented. However, the legislator has granted the member states a right of choice in some points, and the publication of the CSRD draft now provides clarity on the planned national interpretation of these. One central option, for example, concerns the question of who may act as the auditor of sustainability reporting alongside the statutory auditor. At this point, the current draft bill stipulates that in Germany only other auditors are permitted to audit sustainability reporting in addition to the statutory auditor.

Due to the draft stage, it remains to be seen whether any significant changes will be made to the content of the legislative text during the legislative process. First of all, the federal states, associations and the public are now invited to submit comments on the draft bill on the ministry's website by 19 April 2024.