Several German ministries led by the Socialist and Green parties have sent a letter to the EU Commission with the objective of rolling back European legislation on corporate sustainability reporting. This legal framework will be applicable to 27 EU Member States as of January 1st, 2025, but German parties, immersed in electoral and political infighting, are using this legislation to promise quick, but dysfunctional solutions.
Companies across the EU (and globally) are already preparing and investing to comply with the EU CSRD and the sustainability standards. Certain countries like Denmark, Sweden and Spain had already expanded the previous legislation to incorporate more companies to report on sustainability data. The attempts coming from Germany are undermining other Member States’s efforts that are focusing their attention on supporting companies instead of confusing them and creating major legal uncertainty.
Regarding the content of their letter, German ministries prepared a set of proposals without engaging with relevant internal and external experts, proposing a sort of ‘magic potion’ that completely misses the point (or directly and intentionally misleads) how the CSRD and EU standards have been built.
The EU standards are by nature a business tool for companies to identify and address their sustainability risks and impacts from a strategic perspective. They address a market failure to deliver convergence and consolidation between different frameworks and standards.Moreover, the conflation of proposals from German ministries would break the information system between companies that has been established in European legislation, based on international standards.Sustainability reporting is the basis of a sustainable finance system whose purpose is to direct capital towards transition and innovation. With this framework, companies are guided to focus on what is really relevant for them, ensuring comparability and curbing greenwashing.
The CSRD system is key to ensure a level playing field, requiring transparency from non-EU companies and supporting EU manufacturing against unfair competition that does not respect fundamental human rights and environmental standards.
This reaction has been prepared by Frank Bold and is supported by WWF EU.
This legal briefing provides a detailed overview of the purpose, requirements, timeline, and most importantly, key interactions between different sustainability laws that will apply to companies operating in the European Union.
Speech by Filip Gregor at the public hearing on Reporting Obligations, held by the European Parliament's Committee on Legal Affairs on 13th May 2025
Whilst the European Parliament and the Council are in the midst of analysing and debating the Omnibus Simplification Package, we suggest our key changes for the co-legislators to implement to ensure that the CSRD is respected.
