New Sustainability Reporting Obligations – Is your company also affected by this?
On March 9, 2017, after more than three months of delays, the Bundestag passed the law to strengthen companies’ non-financial disclosure in reporting (Gesetz zur Stärkung der nichtfinanziellen Berichterstattung). The background to this is the growing interest among various stakeholders in the environmental and social impact of a company’s business activities. The sustainability report enables companies to communicate to the public the measures that they are taking regarding the sustainability of their processes and production flows. The stakeholders are as varied as their interests and include shareholders, investors, business clients, private clients, suppliers, governments, authorities, non-government organizations (NGOs), and scientists.
What is it all about?
The CSR Directive Implementation Act – based on EU Directive 2014/95/EU of October 22, 2014 – requires companies to report annually on its activities in these five areas:
- Environmental issues – e.g. greenhouse gas emissions, water consumption, air pollution, use of (non-)renewable energy, conservation of biological diversity
- Employee matters – e.g. gender equality, working conditions, respecting the rights of trade unions, protecting health, workplace safety
- Social issues – e.g. the influence and impact of companies on the surrounding municipalities
- Respecting human rights – e.g. in terms of the supply chain
- Corruption and bribery – e.g. observation of rules of conduct that conform to laws and directives (compliance)
Who is affected?
The corporate social responsibility reporting obligation affects capital-market-oriented companies…
- … that employ on average more than 500 employees in one business year and
- … have a balance sheet total of more than EUR 20 million or
- … have sales totaling more than EUR 40 million
N.B.: Corporate subsidiaries do not need to submit their own CSR report, provided that the parent company publishes a sustainability report that complies with EU regulations.
When does the sustainability report have to be submitted?
The obligation to submit a CSR report will apply retroactively for all business years beginning after December 31, 2016. The publication deadline is four months after the balance sheet date, unless the sustainability report is included in the annual report.
Companies can align themselves with different national, European, and international frameworks such as the Sustainability Code (DNK), the OECD Guidelines for Multinational Enterprises, ISO standard 26000, the Global Reporting Initiative Standards or UN Global Compact. If companies do not align themselves with any of the above, they must explain why not.
This puts many companies on the spot. These are international companies, which need to not only prepare the mandatory sustainability report for the first time in 2017, but also have it translated from German into English or into other languages. EVS Translations is an experienced translation service provider and would be happy to translate your sustainability report.
Our tip: Include your CSR report in your annual report. This saves not only time, but also the printing and translation costs for your annual report including sustainability report.
For more information, call me on 030 5321 3560 or e-mail me at email@example.com.
I look forward to talking to you about your personalized translation project on sustainability.
Michael Schacht – Business Development Manager