Current developments in sustainability reporting

The implementation of the Corporate Sustainability Reporting Directive (CSRD) remains the subject of intense political debate. Both at EU level and in Germany, there are calls for simplifications, a reduction in reporting obligations and possible postponements of the implementation deadlines.

Current developments at EU level: simplification and consolidation

In November 2024, Commission President Ursula von der Leyen announced an initiative to simplify ESG reporting obligations. The aim is to bundle the CSRD, the Corporate Sustainability Due Diligence Directive (CSDDD) and the EU taxonomy in an omnibus procedure and thus reduce the bureaucratic burden on companies. This project was formalized in the “Competitiveness Compass for the EU” published on 29.1.2025. The EU's goal is to reduce reporting obligations by at least 25% for all companies and by 35% for small and medium-sized enterprises. This is to be achieved, among other things, by introducing an additional size category, so-called “small mid-caps”.

The European Commission has announced the draft omnibus standard for the end of February 2025. This could mean a decisive change for companies, as the reporting requirements are to be revised and better coordinated. However, it remains unclear to what extent material obligations will actually be reduced or merely structurally reorganized.

Debate in Germany: postponing and adapting the CSRD?

The German government was unable to complete CSRD implementation in 2024 and it is unclear when this will become a priority after the new elections. There are now increased political efforts to postpone the implementation of the CSRD and to mitigate the reporting obligations for companies. In letters to the EU Commission, both the Federal Minister and the Federal Chancellor have spoken out in favor of a two-year delay to the CSRD and an increase in the threshold values in order to ease the burden on small and medium-sized enterprises (SMEs). France is also pursuing a similar approach and is calling for a delay and a stronger focus on climate-relevant indicators.

At the same time, there is resistance to softening the reporting obligations. Large companies such as Amundi SA and Electricité de France SA have signed an open letter to the EU Commission in which they call for the current timetable to be maintained. Their argument: a delay would lead to regulatory uncertainty and put companies that have already prepared for the requirements at a disadvantage. It should be noted here that France, unlike Germany, has already transposed the CSRD into national law and the signatory companies already have to prepare ESRS-compliant sustainability reports for the 2024 reporting year.

IDW calls for less bureaucracy in sustainability reporting

In a letter to the EU Commission dated January 20, 2025, the Institute of Public Auditors in Germany (IDW) made further proposals to reduce bureaucratic burdens in sustainability reporting. A clear separation between binding legal requirements and non-binding guidelines, a simplification of company-specific disclosures and a review of the planned sector-specific reporting obligations are important.

Conclusion: Preparation remains crucial

Despite the ongoing discussions and the associated legal uncertainty, companies should continue to prepare for the implementation of the CSRD. For non-capital-market-oriented, large companies under accounting law, the CSRD is expected to continue to apply from the 2025 financial year - unless there is a formal postponement, which cannot be ruled out at the present time. We recommend using the remaining time to prepare for sustainability reporting and future-proof your processes. We will of course keep you up to date in our blog series.