The 2024 reporting season held a surprising twist for many companies: the collapse of the governing coalition meant that the European Corporate Sustainability Reporting Directive (CSRD) was not transposed into German law as expected. However, many corporations had already made extensive preparations for the implementation of the CSRD with uniform European reporting standards, the European Sustainability Reporting Standards (ESRS). Large companies are now continuing along this path even without national legislation. This is shown by the analysis „CSRD Implementation in the Dax 40“ by Forvis Mazars, which is available ahead of time to the Börsen-Zeitung. For this analysis, the 34 sustainability reports submitted by Dax companies by the end of March were evaluated.

A key finding: in their non-financial reporting for 2024, all of the companies examined have aligned themselves with the ESRS. Moreover a good 80% of the corporations have already fully applied the standards, while the others have at least partially done so.

The simplifications brought about by the Omnibus Initiative, with which the EU aims to relieve small and medium-sized enterprises in particular of ESG regulatory burdens, have had little impact on large corporations, says Moritz Sckaer, partner at Forvis Mazars and managing director of the company's sustainability consulting division, Stakeholder Reporting. „The ESRS have established themselves as a common standard, especially among internationally active companies.“ However, Sckaer sees major differences in the processing of the information: „Some sustainability reports are only 50 pages long, while others are more than 200 pages.“ In general, German companies report in considerable detail.

A study by the management consultancy Kirchhoff Consult recently came to the same conclusion. It showed that CSRD reports from DAX companies average 148 pages, while those of their European competitors average only 116 pages. Sckaer agrees with Kirchhoff Consult's explanation that the high standards set by auditors are one reason for the greater length of the reports. „The Institute of Public Auditors has set very high standards.“

Furthermore, he says, it is common practice in Germany to implement new legal requirements in great detail. „German companies adhere quite closely to EU guidelines,“ he observes. „In Scandinavia, for example, sustainability reporting is more liberal.“

According to the consultant, both models have their advantages. With the German approach, the information is very easy to compare. „The Scandinavian model is more understandable and often presented in a more appealing way,“ says Sckaer. German companies are now increasingly orienting themselves towards this model. After companies have tentatively approached CSRD-compliant sustainability reports in 2024, it is now time to fine-tune them. „In our consulting work, we are currently often discussing with clients how to improve the readability of sustainability reports,“ says Sckaer.

Voluntary formats are also increasingly being used to highlight individual projects and prepare them for a wider audience. „This enables companies to reach target groups who are interested in ESG information but do not want to wade through dozens of pages of regulatory-style presentations.“

During the current annual general meeting season, companies are once again selecting auditors for their sustainability reports. Last year, around three-quarters of the DAX companies surveyed had their reports audited with limited assurance, according to the Forvis-Mazars study. A further seven also opted for reasonable assurance for selected key figures. This often happens when individual key figures are included in the variable remuneration of board members, explains Sckaer.

The only company that has had its entire sustainability report audited with sufficient certainty is Allianz. „I'm not surprised that it's a company in the insurance industry,“ says Sckaer. „When it comes to the insurability of locations or infrastructure, environmental risks are already an important factor today.“

When exactly the CSRD will be transposed into German law remains to be seen, but Sckaer believes that companies will not fall behind in their ESG reporting efforts compared to previous years – even if some DAX companies such as SAP bow to political pressure from the US and change course on their diversity programmes, for example. „I am surprised at how quickly this is happening,“ admits Sckaer. „In the world in which these corporations operate, these issues are by no means losing importance in my view.“

Sckaer emphasises that the application of European reporting standards (ESRS) could lead to greater transparency and comparability, particularly when it comes to social issues. The Forvis-Mazars analysis shows significant progress in the disclosure of the gender pay gap, which highlights gender-specific differences in earnings. In the latest survey, 82% of companies provided information on the gender pay gap, compared to only 20% in the previous year.

The jump is even greater for the ratio that compares the remuneration of the highest-paid person to the median annual remuneration of all employees. In 2023, only 5% of DAX companies disclosed this so-called „CEO ratio“, but for 2024, the information can be found in 80% of the reports examined. The higher level of transparency shows progress, but can also serve as a warning system for supervisory bodies, says Sckaer: „If the figures deteriorate, the supervisory board can make specific enquiries.“