Is ESG reporting mandatory in Germany?

Yes, ESG reporting has been mandatory for certain companies in Germany since 2017, following the implementation of the CSRD Implementation Act.

This requirement applies to large, capital market-oriented companies, insurance companies, financial service providers, credit institutions, and cooperatives. However, for many other companies, ESG reporting remains voluntary until the end of 2024.

Possible standards for ESG reporting in Germany:

One of the complexities of ESG reporting in Germany is the absence of a universal format. Companies have the flexibility to choose from various German and European standards. Two of the most popular frameworks at the national level are:

German Sustainability Code (DNK): A comprehensive standard widely adopted by German companies.
Global Reporting Initiative (GRI): An internationally recognized framework that provides guidelines for sustainability reporting.
The European Union is introducing mandatory sustainability reporting standards for companies.

These standards, developed by the European Financial Reporting Advisory Group (EFRAG), will apply to all businesses covered by the Corporate Sustainability Reporting Directive. While these standards will provide a framework, it's important to remember that every company's ESG situation is unique.

But, the question is, which companies need to engage in ESG reporting?