EU Taxonomy, CSRD, Climate & Co. – We answer your questions from the 1st ESG Day


published on 16 december 2022


Whether online or on-site in Cologne – your lively participation in our 1st ESG Day has once again highlighted the high relevance of the topics of sustainability, ESG and CSR reporting. We would like to take this opportunity to thank you once again for your great interest in the event and the positive response afterwards! Due to time constraints, some of your numerous questions on the various presentations could not be asked in the plenary session – we would therefore like to answer these in the first issue of our new newsletter “ESG News”: 

EU Taxonomy | CSRD | Energy



Is the taxonomy report part of the CSRD or is it an additional report? 

The Taxonomy Regulation requires companies falling within the scope of the CSRD to disclose the extent to which their economic activities are sustainable within the meaning of the taxonomy. Although the indicators or technical screening criteria for this are defined in separate delegated acts, they must nevertheless be disclosed alongside the other sustainability data defined in the CSRD and specified by the ESRS. Accordingly, the CSRD and the EU taxonomy are closely linked. Since, according to the CSRD, sustainability reporting must be part of the management report in the future, reporting on the EU taxonomy will consequently also be located in the management report as part of the sustainability report. The publication of a separate non-financial report outside the (group) management report is no longer allowed once the CSRD comes into force. 

In your view, how will the economic activities of the public sector, especially local authorities, be taken into account in the taxonomy in the future, since services of general interest are not included as an economic activity? 

Basically, the reporting obligation according to the EU taxonomy depends on the CSRD reporting obligation. Anyone who falls under the CSRD must also report under EU taxonomy. Publicly owned companies must prepare their annual financial statements and management report in accordance with the regulations for large corporations, as stipulated in their articles of association or bylaws. Reporting for other public companies is based on the provisions of state law. At present, however, there is no direct obligation to prepare a sustaina­bi­lity report. Furthermore, it is currently not foreseeable to what extent the economic activity of providing services of general interest will play a role. Neither in the already published Delegated Acts nor in the proposals of the Platform on Sustainable Finance on technical assessment criteria for the environmental goals 3-6 is this economic activity to be found. Nevertheless, there could be an indirect obligation (for municipalities) via the proof of sustainability commitment for grant and loan providers within the EU taxonomy. 


Does the EU taxonomy also apply to companies reporting according to the DNK? 

The DNK itself is a framework that does not trigger any reporting obligation according to the EU taxonomy. In principle, all companies that currently fall within the scope of the CSR-RUG/NFRD are already required to disclose information on the alignment of their business activities with the EU taxonomy as of January 1, 2022. In this context, it is irrelevant according to which standard the sustainability reporting has been carried out so far. DNK would be a possible, but not mandatory standard. As a result of the CSRD coming into force from the 2024 financial year, the group of companies subject to reporting requirements and thus affected by the EU taxonomy will gradually expand. The same deadlines apply for reporting on the EU taxonomy as for the first-time application of the CSRD. 



Will the CSRD completely replace the CSR-RUG in Germany in 2024? And if so, is 2024 the transition? 

Yes, the CSRD will completely replace the NFRD and its German implementation in the form of the CSR-RUG from the 2024 financial year. To this end, the German legislator must transpose the CSRD into national law within the next 18 months. The application of the new directive and its national implementation will take place in four phases:
  • Companies that currently already fall within the scope of the CSR-RUG: first-time reporting in 2025 on the financial year 2024 
  • Large companies that currently do not fall within the scope of the CSR-RUG: first-time reporting in 2026 on the financial year 2025 
  • Listed SMEs (except micro undertakings), small and non-complex credit institutions, and captive insurance undertakings: first reporting in 2027 on the financial year 2026 
  • Non-EU companies with net sales in the EU exceeding EUR 150 million if they have at least one subsidiary or branch in the EU and exceed certain thresholds: first reporting in 2029 on the financial year 2028. 


At what point is a company considered a large company according to CSRD? 

The CSRD itself only refers to large companies. Large is derived from the size classes known from the German Commercial Code. In order to be counted as a large company, 2 of the following 3 criteria must be met on two consecutive balance sheet dates: 
  • More than 250 employees on annual average  
  • More than € 20 million balance sheet total  
  • More than € 40 million net sales 


Is the employee size criterion that determines the CSRD's scope to be calculated by headcount or full-time equivalent? 

The size criterion refers to the number of employees by headcount and not by employment level, analogous to the determination of employees in the HGB. 

Are individual companies required to report or the Group? 

The reporting obligation according to CSRD relates to individual companies, whereby subsidiaries that are included in the group management report and the sustainability report of the group contained therein are exempt from the reporting obligation. The subsidiary must disclose in the management report which parent company publishes the group management report. 

Could you please explain what the requirement for ESG reports to be digital in the future will mean in concrete terms? What examples are there of this? 

The Commission proposal anticipates the increasing digitization of sustainability information. By making the data available digitally, the EU is aiming to make the data easier to find and compare. In the course of this, the CSRD provides that the member states are to oblige the reporting companies to make the management report including sustainability reporting available free of charge on the company website. The reporting is to be tagged in accordance with the electronic reporting format ESEF (European Single Electronic Format). This format has already been in use for the disclosure of the annual financial report of capital market-oriented companies in the EU since the 2020 financial year. The exact tagging requirements as well as a manual and an example of digital reporting in accordance with ESEF can be found on the homepage of the European Securities and Markets Authority (ESMA). 

We will answer further questions around the topic of digitization in the context of sustainability reporting in a separate article in the next issue of our ESG News. 


Just to clarify again – It is not certified for compliance with norms, but only checked whether statements are made about the criteria at all? Are there KPIs to be met? 

The audit of sustainability reporting will generally be performed in accordance with ISAE 3000 (revised) with limited assurance against appropriate criteria, i.e., in the future the CSRD in conjunction with the ESRS and, if applicable, the Greenhouse Gas Protocol. In doing so, we check compliance with the requirements of the standard. The ESRS do not specify threshold values or concrete targets. If you state targets in your report and describe their achievement, we will check in the course of the audit to what extent the description of the targets and the achievement of the targets is correct and complete. 


In addition to ESG regulation and reporting requirements, the ESG Day also highlighted the topic of the energy crisis. Our expert Kai Imolauer answered questions about his presentation as follows:   

What do you think is the path to climate neutrality? 

Energy efficiency, renewable energies, circular economy – and the courage to go innovative ways to put the respective business on sustainable pillars. 


Are you optimistic about carbon capture technologies? 

Energetically, photosynthesis is the best process to realize “carbon capture”. Thus, it is a matter of reforestation and creation of biomass on a very large scale – technologically (with renewable energies) the current state is not yet a revolution, but a beginning. The necessary amounts of “carbon capture” are so huge that I lack optimism in the short term and therefore more effort must be made to avoid emissions. 


What solutions are there for companies in the medium term? 

Energy efficiency – everything that fits at the company. Electrification of energy flows – where possible – and building perspectives towards hydrogen where it is not possible; distributed generation (wind, PV) to reduce the pure purchase of electricity and supplemented by green corporate PPAs to represent electrification with green electricity completely in all sectors (electricity, process heat, transport). 


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Christian Maier


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Anna Wilhelm

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Kai Imolauer


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