Sustainability

Omnibus Initiative 

Status: March 2025. The EU Commission is planning to significantly simplify sustainability reporting as part of the Omnibus Initiative. The aim is to reduce mandatory disclosures by at least 25%, and by as much as 35% for SMEs. The regulations affected are the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), the Carbon Border Adjustment Mechanism (CBAM) and the EU Taxonomy Regulation. 

The focus of the initiative is to remove non-material or overlapping information. Particularly:

• Fewer relevant data points: Non-critical information should be omitted.
• Distinction between mandatory and voluntary disclosures: Clearer distinction between mandatory and voluntary disclosures.
• Raising the thresholds: Postponement of reporting requirements for companies.

Voluntary Reporting Standard VSME

Status: March 2025. The Voluntary Reporting Standard VSME (Voluntary Sustainability Reporting Standard for SMEs), which was originally intended for SMEs only, will now also be of interest to companies that are expected to be exempted from the reporting obligation for 2026 under the Omnibus-Initiative. This reporting standard facilitates a simplified and more flexible approach to sustainability reporting. Companies can decide for themselves which ESG aspects they disclose without having to fulfil the full scope of the CSRD. All report components within the VSME can also be included in the CSRD report.

Germany's delayed implementation of the CSRD

Status: January 2025. The introduction of the Corporate Sustainability Reporting Directive (CSRD) into German law was not implemented as planned in 2024. This puts Germany in a minority of countries that have not yet implemented the law and are therefore in breach of EU law. Consequently, the EU Commission initiated infringement proceedings against Germany and 16 other member states in September of last year. As of January this year, implementation was pending in only five other countries, in addition to Germany.

Opportunities and the need for green transformation

The current focus is on regulatory developments for medium-sized corporations. Capital market-oriented companies keep on preparing appropriate sustainability reports. It is also important to note that many business partners increasingly demand sustainability data, a significant proportion of customers expect sustainable business practices, and that sustainability and its indicators play a major role, also for investors and financial institutions. Pressure is coming from all sides, not just from regulation. Furthermore, it has become increasingly evident over the past year that the rising costs of fires, floods and droughts, which are exacerbated by climate change, must be considered alongside the costs of climate protection. However, effective climate protection and adaptation strategies also require a reliable data base at company level in order to develop concepts, measures and targets.

The automotive industry's example illustrates the opportunities that can arise when a company focuses on sustainable products at an early stage. This applies to the pioneering American company as well as the increasingly successful Chinese suppliers. It is also crucial to consider the potential strategic competitive advantages that could emerge from a green transformation, and to ensure that sustainability is not merely seen as a means of meeting regulatory requirements. Supply chain reporting to automotive companies, most of which are listed on the stock exchange, also plays an important role in addressing the issue. Sustainability is not a transient issue; it is a long-term commitment.