Due to the collapse of the German Federal Government, the timely implementation of the CSRD (Corporate Sustainability Reporting Directive) into German law is in danger. Actually, the legislator should have transposed the European directive into national law by July 6, 2024, but most recently aimed for implementation by December 31, 2024. The CSRD Implementation Act (CSRD-UmsG) envisaged for this purpose Implementation Actis still being discussed in the Bundestag and given the current political situation and the dwindling time, it is not to be expected that it will be adopted in time. Germany is therefore threatened with infringement proceedings by the EU. The CSRD Implementation Act is intended to convert the EU Directive into national law almost unchanged.
The EU Directive provides baseline and cornerstones; national law defines specific legal rules and regulations. In this context, the German Commercial Code (HGB) and other relevant laws, such as professional regulations for auditors, who ultimately have to audit the corresponding sustainability passages in an organization’s management reports, are to be adapted.
If the CSRD-UmsG is not adopted in time, the existing previous regulations will remain in force until further notice. In concrete terms, this means that companies that are already obliged to report will continue to report as before, and the EU taxonomy must also be observed. German organisations that would have to report in compliance with the CSRD from 2025 or later will only be subject to the reporting obligation as soon as the CSRD Implementation Act is coming into force. However, it is to be expected that this law will be at the top of the agenda for a new government and will also be implemented quickly after the elections. It is therefore advisable for these companies to prepare for the reporting for the 2025 financial year, as the law will very likely be passed in the course of the year and may come into force retroactively as of 1 January 2025.
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