Sustainability report
Many companies have long been familiar with reporting. They are not even questioned, especially when it comes to financial topics such as accounting. Reporting on non-financial topics, on the other hand, is new territory for many companies. The challenge now is to focus on the triad of ecological, social and economic responsibility in all areas of the company. After all, the overarching goal is climate neutrality by 2050. To ensure that not every company cooks its own soup, the EU has created a central element for reporting with the Corporate Sustainability Reporting Directive (CSRD). This ensures uniform and comparable reporting. Companies that consistently implement the EU guidelines and standards and comprehensively measure, evaluate and communicate their sustainability performance have a clear competitive advantage.
Obligations and deadlines for sustainability reporting
Not all companies are required to report at the same time or even immediately. In many places, reports have already been published voluntarily. experts from various sectors recommend preparing reports on a trial basis so that companies can approach the topic slowly, so that they are not under pressure later on, but can practise. Initially, however, it is primarily the large corporations that are obliged to report.
Update through the omnibus measures of February 2025
In February 2025, the EU Commission brought a lot of movement to CSRD reporting with the Omnibus Initiative and initiated a comprehensive revision of the reporting requirements. With the aim of reducing bureaucracy, providing companies with more planning security and ensuring a more practical introduction to sustainability reporting, there are to be some relaxations in future. The key changes for CSRD reporting are as follows:
- In future, only companies with more than 1,000 employees and more than 50 million euros in turnover or more than 25 million euros in total assets will be subject to the CSRD obligation.
- The reporting obligation will be postponed until 2027 or 2028 for many companies.
- Sector-specific ESRS will be eliminated and the focus will instead be placed on quantitative KPIs.
- Capital market-oriented small and medium-sized enterprises (SMEs), which were originally due to report from 2026, were completely exempted from the obligation
Companies should review their reporting plans on the basis of the new framework conditions - in particular, whether an exemption applies or whether voluntary transparency is still expected (e.g. by customers, investors or banks).
Our recommendation: Although small and medium-sized companies will be exempt from the reporting obligation in future, reports and data collection should not be put on the back burner. As suppliers and part of the supply chain of larger companies, requests for information may still arise in the future.
It is advisable for small and medium-sized companies not to put off reporting and data collection for too long. As a supplier and part of the supply chain of larger companies, the request for information may come earlier.
Step by step to sustainability reporting
Some preparation is required before you can start with the actual reporting. A few key questions will help you get there step by step:
1. inventory
- What has already been done?
- Which figures are available and which are needed?
- Is the business model sustainable?
2. identify stakeholders
- Who are the internal stakeholders? Is it just the employees?
- Do you know your external stakeholder groups?
3 SDGs
- Do you already use the SDGs as a guide for sustainable development?
- Did you know that the 17 SDGs provide important impetus and points of reference for analyzing business activities?
4. double materiality analysis
- Which environmental, social and governance issues (ESG issues) are material?
- Have both the impact perspective (inside-out) and the financial perspective (outside-in) been taken into account?
5. sustainability management
- Is there a sustainability officer?
- Was the responsibility spread over several shoulders?
- Are qualifications available in the company?
6. monitoring, evaluating and reporting
- Is controlling on board?
- Do you know your key figures?
- Do you use Excel or special software for your reporting?
ESRS - Filling the sustainability report with content
If the CSRD regulate the why and who, the European Sustainability Reporting Standards (ESRS) prescribe the how and what - i.e. the mandatory content. This refers to the aspects that a company must report on in its sustainability report in future. All ESG areas are covered. Through the overarching and technical reporting requirements, the ESRS ensure uniform and comparable reporting.
The following table lists the 12 ESRS standards: The first set contains two cross-thematic standards or cross-sectional standards - ESRS 1 and ESRS 2 - as well as 10 topic-specific standards. ESRS 1 contains general requirements for the preparation and presentation of sustainability reports and stipulates that the individual topic-specific standards are subject to a materiality analysis. ESRS 2 sets out general disclosures that must be reported for all companies regardless of their materiality analysis.
In addition, ESRS 2 provides the structure and content for the topic standards, which are divided into four disclosure areas:
- Corporate governance
- Strategy
- Management of impacts, risks and opportunities (Impact, Risk & Opportunity Management)
- Key figures and targets (Metrics & Targets)
- If a company concludes on the basis of the double materiality analysis that an ESRS topic is not material, all disclosures on this topic can be omitted from the report at the company's discretion, without further explanation.
- However, this does not mean that the information on the individual ESRS topics is completely voluntary.
- Material information must be listed and the materiality assessment process must be made transparent.
- Even if the explanation does not have to be published, there is still the possibility that it will be subject to a mandatory audit.
- There must be plausible and valid reasons if companies do not consider mandatory ESRS topics to be material.
Update through the Omnibus Initiative: The EU's measures provide for the development of sector-specific ESRS standards to be suspended. Instead of sector-specific detailed specifications, the focus is shifting to overarching, quantifiable indicators and company-specific materiality. Companies should therefore focus their dual materiality analysis even more specifically on robust KPIs and stakeholder expectations.
Sustainability standards and regulations
In addition to CSRD and ESRS, there are other regulations and standards for different target groups. They differ in terms of the actors involved and the objectives. The standards are therefore also different and initially confusing and complex for many users .
- The German Sustainability Code (DNK) is particularly relevant for companies in Germany. It also provides a framework for sustainability reporting and supports the development of a sustainability strategy. The DNK is particularly useful for SMEs, as it is easy to apply with 20 DNK criteria.
- The GRI standards (Global Reporting Initiative) are relevant for companies that operate internationally. The size and type of organization is not decisive. Even though 93 percent of the world's 250 largest companies report in accordance with the GRI Standards. The information can be transferred to the CSRD report. Here too, the aim is to create transparency about the environmental and social impact of companies and other organizations.
- The International Sustainability Standards Board (ISSB) is currently developing a consistent set of rules. These standards are based on the expectations of investors. IFRS S1 contains requirements for the disclosure of sustainability-related financial information, while IFRS S2 regulates climate-related disclosures.
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