The Sustainability Report according to CSRD (Corporate Sustainability Reporting Directive) – Part 1

The Sustainability Report according to CSRD (Corporate Sustainability Reporting Directive) – Part 1
November 1, 2021
Insights overview

Given the increasing relevance of non-financial reporting, the EU aims to expand its requirements. On April 21, 2021, the new draft directive was published under the name Corporate Sustainability Reporting Directive (CSRD). In our series of topics, we will provide comprehensive information about the new CSRD. In the first part of our series, we would like to give you an overview of existing and upcoming obligations for sustainability reporting.

Explanation of the starting point based on the CSR Directive Implementation Act (CSR-RUG):

The reporting on non-financial aspects of corporate activities began in 2017 with the CSR-RUG. In this law, the foundation for expanding the management report of groups or capital market-oriented companies (with more than 500 employees) is established. It is envisaged, in addition to financial content, to publish a non-financial statement to create transparency regarding sustainability-oriented issues. Responsible and sustainable actions of companies should thus be made visible to all and indirectly promoted. The non-financial statement must include information on environmental and social matters, as shown in the table below. The reporting obligation under CSR-RUG can be fulfilled as an extension of the management report or as a separate sustainability report. Non-compliance with the reporting obligation can result in fines of up to 10 million euros, based on the company's turnover and profit.

Minimum content of a non-financial statement according to §289c HGB

In addition to the mentioned contents, it is envisaged that these should be contextualized within the individual context of the company. For this purpose, the following aspects should be described:

  • Business model
  • Concepts pursued fort he aspectsmentioned above
  • Results oft he concepts
  • Significant risks affectingsustainability
  • Company`s handling oft he risks
  • Disclosure of significant non-financialperformance indicators

The new EU directive: Corporate Sustainability Reporting Directive (CSRD)

In recent years, both the EU Commission and the Federal Ministry of Justice and Consumer Protection (BMJV) have conducted examinations on the application of non-financial reporting. These investigations revealed that there is further potential for improvement and standardization in the European Union. On April 21, 2021, the EU Commission published its proposals for the revision of the CSR Directive. They aim in particular to enhance transparency in sustainable areas, responding to the increased demand for sustainability-related information, especially in the context of "green" investment products. The new Corporate Sustainability Reporting Directive (CSRD) contributes to advancing the European economy towards a sustainable and inclusive financial and economic system. The focus is on the equal consideration of the three pillars of sustainability: environment, social, and economic. Below are the key changes introduced by the CSRD proposal compared to the previous EU CSR Directive from 2014.

Overview of the CSRD



The new CSRD directive aims to take a step towards the equal consideration of financial and non-financial content in corporate reporting. This is done in line with the three pillars of sustainability: Ecology, Economy, and Social aspects.