On 24 July 2024, the Federal Cabinet adopted the government draft for the implementation of the Corporate Sustainability Reporting Directive (CSRD) into German law. The law introduces important regulations for the auditing profession and far-reaching implications for companies that will be obliged to report on sustainability in future.
Audit by the auditor:
- In Germany, the audit of the sustainability report will be anchored with the auditor. This can be the existing auditor or an additional auditor.
- However, auditors must be registered separately and be able to prove that they have completed at least 40 hours of training.
- For the 2024 financial year, the auditor of the annual financial statements is also to be considered the auditor of the sustainability report, provided the auditor was appointed before the law came into force.
- The German government will examine the authorisation of further independent auditors, in particular environmental auditors, in a subsequent amendment to the Act.
Requirements for the ESEF format:
- The requirements for the ESEF format for (group) management reports only apply to financial years beginning after 31 December 2025, regardless of whether the company is listed on a stock exchange.
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What is the ESEF format? The ESEF format (European Single Electronic Format) is a standardised electronic format prescribed by the European Union for the preparation and submission of annual financial reports of listed companies within the EU. It was developed to increase the transparency and comparability of financial reports and to improve the efficiency of transmitting and analysing financial information. |
Audit report and audit opinion:
In contrast to the draft bill, the government draft no longer contains an obligation to prepare an audit report for sustainability reporting. The IDW had campaigned for the deletion of this requirement. In addition, it remains prohibited to integrate the audit opinion on sustainability reporting into the auditor’s report.
Further information:
Draft law on the website of the BMJ
IDW sustainability topic page