Improve,
don't remove.
Stronger standards for
a stronger economy.
Sustainability reporting and supply chain due diligence are key elements of a modern economy. Companies face the challenge of being economically successful while also assuming social and environmental responsibility. Europe has developed regulations to establish uniform standards. These regulations provide businesses with planning certainty and help secure the long-term competitiveness of the European economy.
BACKGROUND
The Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the EU taxonomy are intended to form the framework of this modern economy. The current status of implementation is complex: The CSRD has been in force since January 2023 and is being implemented in stages, with large publicly listed companies required to report for the 2024 fiscal year.
Germany is currently lacking national implementation. The CSDDD at the EU level was adopted after extensive negotiations in May 2024. The EU Commission has initiated the omnibus procedure to harmonize various sustainability regulations and resolve inconsistencies between legal acts to standardize reporting obligations. A result is expected by the end of this year at the earliest.
WHY DO STRONG STANDARDS MAKE THE ECONOMY STRONGER?
- Transparency builds trust
Uniform and comparable sustainability reports, according to CSRD, enable investors, banks, insurers, business partners, and customers to make informed decisions. Companies with a clear sustainability strategy benefit from lower climate risks, greater market opportunities, and better access to sustainable financing. - Risk management and resilience
The CSDDD helps companies identify and minimize risks in global supply chains early on. Sustainable supply chains mean greater security, fewer disruptions, and more stable business relationships in the long term. - Access to capital and investment
The EU taxonomy defines clear sustainability criteria and offers companies guidance on future-proof business models. Capital markets increasingly favor sustainable companies—those who prepare for this development will benefit from improved financing opportunities. - Innovation and competitiveness
Sustainable companies tend to be more innovative. The new standards support the shift to resource-efficient business models and strengthen the European economy in global competition.
The proposed changes currently under discussion as part of the Omnibus initiative risk watering down core sustainability standards. What begins as simplification must not end in ineffectiveness.
What we need now are effective sustainability regulations that deliver real impact—without overburdening entrepreneurs with bureaucracy!
