Responsibility for sustainable development within the business community
The RNE has set itself the goal of promoting sustainability thinking in the business sector. Depending on their impact and the depth of their supply and production chains, companies must shoulder great responsibility here. They also face a variety of special challenges, for instance within the framework of globalisation and the resulting networking of supply relationships between companies worldwide. The Sustainability Council has thus been concerning itself since 2006 with the concept of corporate social responsibility (CSR), which it defines, in the context of Germany’s well-developed SME sector, as “entrepreneurial responsibility for sustainable development”, and the definition applies regardless of levels of hierarchy or legal form.
Reporting on sustainability performance through the Sustainability Code
Any company that produces, acts and trades with sustainability in mind, is dependent on gaining and maintaining the trust of its business partners and customers. The RNE considers credibility to be best achieved through the transparent publication of conflicting goals and hurdles – more so than simply reporting on too flawless perfection. The Sustainability Council has thus committed itself to fostering corporate reporting that aids understanding and offers comparability. In 2011, in the aftermath of the financial crisis, the RNE developed through intensive dialogue with investors and other stakeholders the Sustainability Code (DNK). The Code serves as the reporting standard for sustainability aspects and lowers the entry threshold to sustainability reporting as well as enabling direct comparison of corporate responsibility performance.
The goal here is not the report in itself, but rather to create competitive drive with respect to sustainable business and foster corresponding management practice and transparency. Performance is primarily to be rewarded via the market. The Code therefore has particular significance for financial analysts and investors: they can use it to more easily incorporate information on environmental, social and governance (ESG) factors into their company analyses. It can be used as a basis for valuation within the scope of portfolio management, for corporate bonds, in lending and for providing investors with information.
The advantage of the Code is its condensed and user-friendly form. It provides companies and organisations of all sizes and legal forms with a framework for preparing reporting on aspects of sustainability and their management. By doing so, companies can report not only on their contribution to achieving the goals of the Paris Agreement but also on their own supply chain, such as is called for by the Action Plan for Business and Human Rights of the German Federal Foreign Office. According to the German Commercial Code (HGB), companies with a reporting obligation can use the Code to prepare a non-financial declaration in line with the EU Directive on Disclosure of Non-Financial Information (2014/95/EU).
The Code also contributes to national and international sustainability policy and can be applied beyond Germany’s national borders.