Simplified data reporting for companies under proposed CSRD
December 18th, 2024
The Corporate Sustainability Reporting Directive (CSRD) has become a cornerstone of the European Union's sustainability framework. As businesses grapple with the extensive reporting requirements, Germany's recent proposal outlines several strategies to streamline and simplify the directive without compromising its sustainability goals. Here's an in-depth look at the key proposals.
Germany suggests postponing the CSRD reporting obligations for large, non-public interest entities (non-PIEs) by two years. This delay would allow businesses to prepare adequately and align with the updated framework, pushing the first reports to financial year (FY) 2027 instead of FY 2025. Similarly, small and medium-sized public interest entities (PIE-SMEs) would see their deadlines pushed to FY 2028.
Impact: This change would provide immediate relief to over 13,000 companies in Germany alone, reducing compliance pressure and trickle-down effects on smaller suppliers.
Currently, companies classified as "large" under the CSRD face extensive reporting requirements. Germany proposes raising the thresholds:
Impact: Many entities would shift to smaller reporting categories or be excluded entirely from sustainability reporting, focusing obligations on genuinely large enterprises.
Germany advocates against burdensome sector-specific standards, which are set to roll out in June 2026. Instead, the proposal recommends creating more meaningful, generalized approaches to sustainability reporting.
Impact: This strategy would avoid additional complexity and enable businesses to focus on their unique challenges without excessive regulatory constraints.
The CSRD reporting framework often burdens small businesses through information requests from larger companies in their value chains. Germany suggests targeted measures, such as limiting reporting requests to SMEs before 2027 and simplifying data requirements for smaller suppliers.
Impact: These measures would protect SMEs from disproportionate reporting demands while maintaining the directive's intent to incorporate value chain transparency.
The European Sustainability Reporting Standards (ESRS) require reporting on over 1,000 data points. Germany proposes cutting these requirements by up to 50%, focusing on key quantitative metrics. The country also suggests adopting a phased introduction of individual data points.
Impact: This reduction would immediately ease compliance for businesses, allowing them to focus on strategic sustainability initiatives rather than administrative overhead.
Germany calls for eliminating duplicative taxonomy reporting obligations, such as the Green Asset Ratio. The focus should be on practical approaches that support meaningful sustainability transitions.
Impact: Companies would save time and resources while still contributing to EU-wide sustainability goals.
The German government emphasizes the importance of balancing sustainability goals with manageable reporting requirements. By adopting these proposed changes, the CSRD can become more effective and less burdensome, enabling companies to focus on innovation and growth while aligning with the EU's green objectives.
As these recommendations await consideration, they represent a significant step toward a more business-friendly and sustainable regulatory environment.
Download The proposal (PDF): Link
