Draft bill on the implementation of the CSRD: What will change for companies

Which companies are affected by the new reporting requirements? 

According to the draft, the following companies will essentially be required to report on sustainability in the future:

• Large corporations and equivalent partnerships 
• Large credit institutions, insurance companies, and development banks 
• Large capital market-oriented cooperatives 
• Small and medium-sized capital market-oriented companies, parent companies of large groups, and third-country companies with relevant domestic activities

When do the new obligations come into effect? 

The application is staggered: 

• From January 1, 2025: Companies with more than 1,000 employees that are already required to submit non-financial statements 
• From January 1, 2027: Companies with no more than 1,000 employees that are already required to submit non-financial statements  
• From January 1, 2027: all large companies (except company-owned insurance and reinsurance companies) 
• From January 1, 2028: capital market-oriented, small and medium-sized companies under accounting law, third-country companies with domestic subsidiaries or branches, and company-owned insurance and reinsurance companies

What exactly does the reporting obligation entail? 

The previous non-financial statement will be replaced by a comprehensive sustainability report, which will become part of the management report. Key elements include: 

• Impact of business activities on sustainability aspects 
• Risks and opportunities with regard to sustainability 
• Strategic goals and measures for sustainability 
• Information along the entire value chain (transition period of three years possible for missing information) 

Information in the sustainability report should cover both the company's own business activities and relevant aspects of the entire value chain. However, companies may omit information for a transitional period of three years if they provide justification for doing so. 

In future, the sustainability report must be audited by a certified public accountant or an auditing firm. This will initially be an audit with limited assurance (“audit review”). The results of the audit must be reported in a separate note. 

What special features apply to the electronic reporting format (ESEF)? 

Companies must prepare their sustainability reports electronically (XHTML) in accordance with the ESEF Regulation for the first time for financial years beginning on or after January 1, 2026. The reports must be marked up in a machine-readable format. 

How can companies best prepare themselves? 

Although this is currently still a draft bill, affected companies would be well advised to address the requirements at an early stage and set up the necessary reporting processes due to the complexity of the specifications and the tight deadline. 

Baker Tilly supports you in implementing and auditing your sustainability reporting. Take advantage of this opportunity to strategically embed sustainability in your company and prepare for upcoming requirements at an early stage! Would you like to know what the implementation of the CSRD means for your company in concrete terms? Contact Nils Borcherding and Katharina Engels for individual advice.