On September 3 the German government adopted and published a draft bill, with a Q&A, for implementing the CSRD into national law. Key extracts from these two documents:
Further delay is not an option, given that the deadline for transposing the directive (6 July 2024) has long since passed and the clear obligation to transpose it into national law under EU law remains. The Commission initiated infringement proceedings in Sep 2024.
Therefore, the CSRD, incl the agreed time extension, should be implemented in national law as soon as possible with this draft, on a 1-to-1 basis, with the existing legal framework being adapted accordingly:
- Wave 1 companies with more than 1,000 employees (approx. 240 companies) are due to report on FY 2025. Retroactive reporting for FY 2024 will not be required for constitutional reasons. Companies with fewer than 1,000 empl. are exempted to not be subject for only a short transitional period.
- Wave 2 companies are due to report on FY 2027.
🌿 The CSRD will enable investors, consumers, civil society actors, including NGOs and social partners, and other stakeholders to assess the sustainability performance of companies and to make decisions based on this information, for example regarding investments or consumer spending.
While reaffirming the objectives of the Green Deal, the German government supports the simplification proposals at EU level and advocates for their swift adoption in order to implement the results within the current legislative process.
💶 Costs estimations:
Costs related to federal implementation of administrative fine and penalty proceedings are expected to be offset by additional revenue from these proceedings.
Oversight of auditors is expected to lead to annual costs of 2,2M€ with a staff increase of 9.5 FTE positions. Personnel and operational costs can be partially offset through fees.
The federal annual administrative compliance costs have been estimated to increase by approx. 4,9 M€.
If the scope of the CSRD is restricted as proposed by the Commission (1,000 empl., 50 M€ TO) and the audit requirements remain permanently limited to limited assurance, then only up to 3,900 companies in Germany will be covered in the future, with an estimated annual compliance costs for these businesses of approx. 430 M€.
Under the recently agreed Council mandate (1,000 empl., 450 M€ TO), only 1,300 German companies will remain in-scope. The compliance costs would then be €150 million annually.
⛓️💥 The draft legislation for the German Supply Chain Act (LkSG), approved the same day, aims to completely abolish the reporting obligation under the LkSG, avoiding the risk of duplicated requirements.
🔎 The reduction (-80%) of CSRD in-scope companies will have a direct impact on the demand for assurance services, which is expected to decrease considerably. Against this background, an expansion of the group of auditors authorized to audit sustainability reports does not seem warranted.
The draft bill and Q&A are available on the website of the Federal Ministry of Justice and Consumer Protection:
https://www.bmjv.de/SharedDocs/Gesetzgebungsverfahren/DE/2025_CSRD-UmsG.html?nn=110518