To be honest, I was surprised that the German government published a draft of the CSRD implementation Act (CSRD-UmsG) yesterday. Of course they must continue with the CSR-Directive, but with all political dialogues they held lately, I thought it would not happen any time soon. Another point why I was surprised is that the Omnibus discussions and negotiations are ongoing in the European Commission and a draft makes limited sense at the moment, because I would wait until all negotiations have been finished. Nevertheless, I read the the draft about the CSRD Implementation Act, here is the summary:
Background and Purpose
The draft law implements the Corporate Sustainability Reporting Directive (CSRD) (EU) 2022/2464, as amended by Directive (EU) 2025/794, into German law. Its purpose is to ensure that German companies meet the new, expanded requirements for sustainability reporting in line with EU law.
Who is required to report?
According to the draft (see new § 289b HGB-E), companies must prepare a sustainability report if they are: Publicly listed companies within the meaning of § 264d HGB, which are not micro-companies as per § 267a HGB. Large corporations (Kapitalgesellschaften) as defined in § 267 (3), (4), and (5) of the German Commercial Code (HGB).
One thing I find frustrating about such drafts is their tendency to reference other laws, which themselves reference even more laws. This legal cross-referencing makes it challenging for companies to quickly understand their obligations…
…What size criteria has the HGB?
## Size Criteria – “Large Companies” (§ 267 HGB) ##
A company qualifies as a “large corporation” if it meets at least two out of three criteria on the balance sheet date of two consecutive years:
- Balance sheet total: more than €25 million
- Net revenue: more than €50 million
- Average number of employees: more than 250 during the year
Publicly listed companies (as per § 264d HGB) are companies whose securities are admitted to trading on an organized market as defined in § 2 (11) of the German Securities Trading Act (WpHG).
Micro-companies (§ 267a HGB) are exempt from the requirement.
–> Wait! For months we are discussing back and forth about company size and reporting obligations. 250, 1,000 or 3,000. The draft of the German Government reverts to 250 again? Was all the lobbying for nothing? No ;). The figure of 1,000 employees is mentioned in the draft legislation, but with a crucial note: It is not yet included in the draft law itself, but rather as an outlook on possible changes at the EU level (“Substance Proposal”), which has not yet been adopted.
Exemptions
Subsidiaries are exempt if the parent company, based in the EU or EEA, already publishes a group sustainability report that covers them, in accordance with § 289b (2) and (3) HGB-E.
Timetable
With the “Stop-the-Clock” amendment (Directive (EU) 2025/794), the reporting requirements are introduced in phases:
— From FY 2025: Companies already subject to the existing non-financial reporting obligation (large publicly listed companies, banks, insurers with >500 employees, large group parent companies).
— From FY 2027: All large companies, banks, insurers, and all large parent companies (widened scope).
— From FY 2028: All publicly listed small and medium-sized companies, banks, insurers, and certain EU subsidiaries and branches of non-EU groups.
There are no concrete timelines for moving forward. But on page 2 “Problem and Objective” the draft states that the requirements should be implemented into national law as quickly as possible.:
“A previous implementation bill, which had been introduced into the parliamentary procedure during the 20th legislative period (Bundestag printed matter 20/12787), has lapsed due to the principle of discontinuity and must therefore be reintroduced. […] The requirements of the CSRD, including the already adopted postponement through the Stop-the-Clock Directive, should therefore be implemented into national law as quickly as possible with this draft.”
Summary
The good news is that the German government is now drafting a CSRD Implementation Act, which means that companies will have more clarity—at the latest by the end of this year—on how to report the non-financial statement (now known as the sustainability report). While further changes can be expected from ongoing EU discussions, this will be the legislation that German industry must follow. If the threshold is raised to 1,000 employees, only around 3,900 companies in Germany will be subject to the CSRD reporting requirements in the future.