Editorial ESG News 1/2025

The topic of “sustainability” is here to stay. We should all be able to agree on this point. It is also clear that everyone has a responsibility with regard to sustainability. This applies to civil society as well as to entrepreneurs. Sustainability or responsibility for sustainability goes in line with transparency, or better still, with comprehensible, credible transparency. This brings us to sustainability reporting. There have also been various sets of rules for this for many years, such as the rules of the GRI Global Reporting Initiative. At EU level, the so-called EMAS (Eco-Management and Audit Scheme), better known in Germany as the Eco-Audit Regulation, was intended to make a contribution in this direction from the late 1990s onwards. Without criticizing the scope, areas of application or other aspects of these regulations, these approaches lack binding force. It was therefore logical that the EU administration, in conjunction with the so-called “Green Deal”, recognized the topic of “sustainability reporting” as a key lever for targeted improvements in sustainability. This has resulted in a large number of regulations, such as the Corporate Sustainability Reporting Directive (CSRD), the EU Taxonomy, the Corporate Sustainability Due Diligence Directive (CSDDD) and others. In the context of the geopolitical dynamics, the “new” course of the Trump administration, the economic problems in Europe and the pressure for change to which the German economy in particular is exposed, these regulations are seen as correct in substance, but as too bureaucratic and overly burdensome or a competitive disadvantage in terms of their sum and level of detail. As a result, the new EU administration announced a series of simplifying measures in its Competitive Compass at the end of January 2025. This concerns the so-called omnibus initiative, which is intended to condense and streamline individual sustainability regulations in a targeted manner. In this respect, we are all eagerly awaiting what this “omnibus” will look like. Further information on this is expected at the end of February. We provide an outlook in the update article “Omnibus initiative to simplify reporting obligations in sustainability reporting”. 

Nevertheless, the general objective and implementation of sustainability regulation and the long-term strategy behind it are beyond question for us. As usual, we would therefore like to provide you with the latest updates from the various areas of ESG-Environmental, Social & Governance in this first issue of 2025: 

In the area of the EU taxonomy, there were innovations in the form of FAQ documents from the EU Commission, a briefing paper from the German Accounting Standards Committee e. V. (DRSC) and a specification of the timing of the implementation of XBRL tagging. 

The article “Materiality assessment - and then? From data point derivation to reporting structure” explains how to proceed once the material aspects have been determined. We stay with the materiality analysis and explain in “Minimum disclosure requirements for concepts, measures and objectives – overview and practical application” how the minimum disclosure requirements (MDR disclosures) correspond to the so-called IROs using a concrete example. IROs are understood to be the presentation of the significant effects on the environment, society or the economy (impact), the risks for the company (risk) and the opportunities (opportunities), in short IROs.

In “Sustainability reporting: EFRAG publishes draft of fourth implementation guidance”, we discuss the ESRS E1-1 disclosure requirements for the transition plan for climate action. The second article in the SBTs series “Setting and achieving climate targets - setting science-based targets as part of the CSRD” focuses on the importance of medium and long-term targets and the corresponding criteria for target setting.  

We begin our announced focus on data collection in the area of ESG in the Environmental section with the article “Energy supply scenarios for the determination of Scope 2 emissions”. 

In the ESG Legal section, we provide you with a detailed overview of the “EU Chemicals Strategy”. 

And this time our international perspective takes us to our neighboring country Poland, which has successfully transposed the CSRD into national law, and to China​, which is competing in the field of ESG regulation with the Chinese Sustainability Disclosure Standards.

Our aim remains to keep you up to date on a daily basis in 2025 – as part of the omnibus initiative, which is expected to be announced at the end of February, we will send you a special mailing with the latest content.

We hope that we have once again met your taste with this issue. As always, we are always happy to hear any suggestions you may have. 

Yours, Martin Wambach