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string(6529) "German Sustainability Code to be expanded to help SMEs in particular report on their sustainability performance.Berlin, 2 April 2024 – Companies should be able to hit the ground running when they come to implement the new standards for sustainability reporting. With this in mind, the German Sustainability Code (DNK) developed by the German Council for Sustainable Development (RNE) is being updated and expanded with, among other things, a new online platform. The Federal Ministry for Economic Affairs and Climate Action (BMWK) will provide 19,250,000 euros in funding over a three-and-a-half-year period in a bid to minimise the time and effort required for sustainability reporting, especially by small and medium-sized enterprises (SMEs). The move is the German government’s response to the expansion of EU-wide reporting obligations, which will result in some 13,000 companies in Germany having to join the reporting ranks from 2025. The DNK enables low-threshold, legally compliant sustainability reporting by means of free and practical support via, for example, an online platform, training courses and guidelines.
Michael Kellner, Parliamentary State Secretary at the BMWK and the federal government’s SME Commissioner: “We must prevent any additional red tape. Our goal is therefore to take as much pressure as possible off small and medium-sized enterprises in particular, as regards their reporting obligations. These include reporting on sustainable business practices. Companies must be able to supply their contract partners and banks with all the necessary sustainability data in standardised form and also make eco- and climate-friendly economic activity transparent to the public. The German Sustainability Code is the key to this. It will provide free, low-threshold digital support for companies to fulfil the new statutory requirements for reporting on sustainability and due diligence. The standardised, digital, user-friendly format offered by the DNK 2.0 will make reporting a whole lot easier.”
Reiner Hoffmann, Chair of the German Council for Sustainable Development: “Sustainability reporting plays an important part in boosting corporate responsibility for environmental and climate protection and human rights compliance as well as gradually course-correcting towards a sustainable economy. It’s not about sanctions – it’s about transparency. The sustainability report is the product, but much more important is the company’s internal process that results from analysing its own activities and value chain. The companies themselves need this data to configure their business models sustainably and competitively.”
Gerd Röders, President of WirtschaftsVereinigung Metalle and managing partner of the foundry G.A. RÖDERS GmbH & Co. KG: “For our business, the DNK was a valuable motivation to get on with preparing our first voluntary sustainability report. The clear structure and good explanations – in the guide and on the platform – make it comparatively easy for users to write their first sustainability report.”
As well as building an online platform for creating and publishing sustainability reports electronically (by the end of 2024), the expanded DNK offering will include a help desk for companies with technical and content-based questions, as well as support through, for instance, webinars and guidelines. The free service is aimed at both companies that are already obligated to report or soon will be, and those who do so voluntarily, who wish to tackle the increasing demands around the issue of sustainability head on. Added to this are companies which, though not legally obliged to report, nevertheless find themselves subject to the information requirements of their contract partners in the value chain. For these businesses, there will be a simplified entry-level module based on the EU’s voluntary SME standard.
More information
Already since 2014, market-listed companies of public interest in the EU have been required to report on their sustainability performance, as regulated by the European Non-Financial Reporting Directive; in Germany this affects approximately 550 companies. The reporting obligation is being significantly expanded by the Corporate Sustainability Reporting Directive (CSRD), which came into effect in January 2023. As a result, the number of companies across the EU that are required to report will gradually increase from 11,600 to 49,000, estimates predict. In Germany, this will affect around 13,000 companies, starting in 2025, when they will be obliged to submit a sustainability report as part of their annual company report. The criteria within the twelve main areas include, for example, measures to preserve biodiversity at company locations, climate adaptation measures and programmes to protect human rights along the value chain. Reporting on due diligence compliance in supply chains as per the EU’s Corporate Sustainability Due Diligence Directive is likewise required under the CSRD.
The present German Sustainability Code (DNK) was developed by the German Council for Sustainable Development (RNE) and has been supporting companies with their sustainability reporting since 2011. The current expansion of the Code is being conducted by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, with ongoing consulting support from the RNE. The purpose of the DNK is to help companies gain low-threshold access to sustainability reporting and meet the corresponding legal requirements. It is already being used by more than 1,200 companies as a reporting tool to publish their sustainability achievements and develop them further.
Press contacts
BMWK Press Office
Scharnhorststraße 34-37
10115 Berlin
Email: pressestelle@bmwk.bund.de
Phone: +49 30 18615 6121 and 6131
RNE Press Office
German Council for Sustainable Development
Office c/o GIZ GmbH
Potsdamer Platz 10
10785 Berlin
Email: presse@nachhaltigkeitsrat.de
Phone: +49 30 338424 529"
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string(4949) "The debate about the role of companies and financial institutions in the transformation process towards a more sustainable economy includes the discussion of sustainability reporting standards for small and medium-sized enterprises (SMEs). The various sustainability information needs of different business partners and stakeholders of SMEs need to be taken into account here (the DRSC/RNE pilot group recently published an overview of the information needs of different stakeholders with regard to sustainability of SMEs).
The Principal Adverse Impact Indicators (PAIs) are of central importance in this debate on sustainability reporting standards for SMEs. According to the EU Sustainable Finance Disclosure Regulation, PAIs are the basis for information provided by financial market participants on their investments in order to highlight potential adverse impacts on sustainability. The indicators are intended to provide information on potential adverse impacts of business activities on, for example, biodiversity, gender diversity and equality, respect for human rights and energy consumption. According to the recently published proposals by the European standard setter EFRAG (Exposure Draft ESRS LSME and Exposure Draft ESRS VSME) SMEs should also provide more information on these PAIs.
By publishing this heat map, the DRSC/RNE pilot group aims to contribute to the discussion on the development of sustainability reporting standards for SMEs with regard to the PAI. The pilot group assessed the feasibility (difficulty of implementation) of the indicators as well as the demand and relevance for SMEs. The heat map illustrates this assessment and points out particular challenges for SMEs. The need for support for SMEs and the possible need to adapt indicators can be derived from this. The pilot group identified a need for action in particular with regard to the measurement of impacts on biodiversity, Scope 3 GHG emissions and the structures for monitoring compliance with the UNGC principles and OECD guidelines. To assess the indicators, the DRSC/RNE pilot group held expert discussions with representatives of other SMEs, financial institutions and large companies.
Prof Dr Alexander Bassen (University of Hamburg), chair of the DRSC/RNE pilot group, puts the work into perspective: "We were once again able to have insightful discussions with experts in this field for the preparation of the heat map. We are pleased to show where there is a specific need for action and to contribute to the debate on the development of sustainability reporting by SMEs".
Georg Lanfermann, President of the DRSC, adds: "The EFRAG proposals for mandatory and voluntary SME sustainability reporting extensively refer to the PAIs. The heat map is therefore not only highly topical, but also of central importance for the success of EFRAG's work."
[document id="98435"]
Background:
The paper presented is based on the Pilot Group “SME Reporting” initiated as part of the cooperation agreement between the DRSC and the RNE. This group is made up of experienced representatives from SMEs and various stakeholder groups in SME sustainability reporting. This paper is in line with previous publications on the development of sustainability reporting standards. In December 2022, for example, a paper on key elements for SME sustainability reporting standards was published; in August 2023, the pilot group presented an overview of various information demands for sustainability reporting. An overview of the composition as well as past and future activities of the DRSC/RNE pilot group can be found here. As part of the cooperation, companies are to be supported in the implementation of new legal reporting requirements."
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string(6231) "Having adopted the Corporate Sustainability Reporting Directive (CSRD) in January 2023, the EU is gradually expanding the cohort of businesses that will be obliged to report on their sustainability performance moving forward. In Germany alone, some 15,000 companies are directly affected by this expansion of the reporting requirement. “But many more companies are indirectly impacted, because the bigger ones that are obliged to report will need information from their suppliers and business partners in order to provide their own reports”, point out Stephanie Kopp and Florian Harrlandt, coordinators of the German Sustainability Code (DNK) at the German Council for Sustainable Development (RNE). Even though the first companies will not have to report on the 2024 fiscal year until 2025, businesses are better advised to start preparing now rather than wait until nearer the time.
Low-threshold and free to use
Companies wishing to get ahead can avail themselves of a tried-and-tested tool that is free to use, in the form of the DNK. “The DNK is an established standard for structured publication of corporate sustainability performance. The various offerings of the DNK office are just as helpful for first-time users as they are for companies experienced in reporting”, says Dr Alexander Bassen, professor of business administration at the University of Hamburg, former RNE member and academic advisor on the DNK. Already 1,000 users are taking advantage of the DNK’s services, primarily attracted by the low-threshold access to the topic, according to surveys of participating companies. Another benefit of the Code is the impetus it provides for internal reflection and change – something that is also gaining ground among employees.
Transparent and comparable
The RNE launched the German Sustainability Code back in 2010. The idea for a transparency standard came about during the 2008 financial crisis, which had its origins in the inadequate assessment of credit risks. “It was the perfect moment to start including social and environmental aspects in the core analysis of credit and investment risks”, explains Yvonne Zwick, who was on the DNK development team from day one. The impetus came from the banking metropolis of Frankfurt. “The financial crisis revealed that looking at the financials alone was taking too narrow a view. Both the governance and the overall capital stock have to be examined as well if you want to assess how future-proof an investment is”, continues Zwick. To get an accurate picture of this, sustainability performance must be transparent and comparable. So this begged the question of how better management could make the capital market more sustainability-driven in practice.
The answer soon came: with academic support from Dr Bassen, the RNE adopted the DNK in October 2011. Based on a set of 20 criteria, the Code maps sustainability in the corporate context, allowing companies to report on issues such as climate change and compliance with labour law, but also existing targets and measures.
Since then, it has been constantly enhanced and adjusted to new requirements. Major revisions were carried out in 2014, 2017 and 2020, a database and pool of experts were set up, a training concept for partners was established and a series of industry guidelines on the DNK were published. The RNE office consistently monitors the Sustainability Code for coherence with other reporting frameworks and responds to current political developments as necessary.
“The DNK can offer a great deal of added value for companies now and in the future, by consolidating new European reporting requirements and making them easily accessible, for SMEs in particular. That will be a huge help with the implementation and funding of the transformation”, says Dr Bassen, emphasising: “The strategic anchoring of sustainability in companies along with transparent reporting are essential for competitive and future-proof positioning.”
Modular and voluntary
An important aim of the DNK is to turn sustainability into a market-relevant criterion, and the growing number of corporate users shows that this is indeed working. “The DNK is a success story. For over ten years now, large and small firms alike have been working towards the goal of sustainable business with the help of the DNK”, beams RNE Chair Reiner Hoffmann. “What sets the DNK apart is its modular approach. Though a voluntary code of practice, it also enables businesses to fulfil their reporting duties. And it will continue to help companies of any size realise different reporting obligations in the same format”, add Kopp and Harrlandt.
The last two years have seen the number of corporate users multiply. “That’s a clear sign of need for the support the DNK offers. Throughout Germany and beyond, companies are using the DNK to evidence their contribution towards achieving shared objectives like the UN’s Sustainable Development Goals or the Paris climate targets. We are delighted to continue incentivising corporate responsibility with the DNK”, confirms Hoffmann.
Nor does the DNK’s success stop at Germany’s borders. International stakeholders too have long shown an interest in the DNK and the experiences of the RNE in this area. The first full national adaptation emerged in 2016 when the Greek NGO QualityNet Foundation produced the Greek Sustainability Code. An English version entitled “The Sustainability Code” was published in 2014 and further translations are available in Arabic, Chinese, French, Greek, Hebrew, Russian, Spanish, Czech and Romanian.
The need for support as SMEs push on with their transformation will only accelerate. “The DNK has already established itself as an orientation guide, and we want to make sure we keep that up and preferably expand it”, add Kopp and Harrlandt. Having proved itself as a reliable companion for businesses, it would appear that the DNK is here to stay for the next ten years and no doubt beyond.
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string(366) "European companies are going sustainable – at least that’s the plan, as the EU aims to boost sustainability in business with the Corporate Sustainability Reporting Directive. The regulation presents challenges for many companies, but these can be overcome with the German Sustainability Code (DNK). So what is the secret to the transparency standard’s success?"
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Berlin, 2 October 2019 – The German Council for Sustainable Development (RNE) and its Sustainability Code office are entering into a strategic partnership with the financial technology start-up Arabesque S-Ray GmbH. Together, they will be working to create a public and transparent data storage facility for companies’ environmental, social and governance (ESG) data. This project will play its part in achievement of the UN’s Sustainable Development Goal 17 “Partnerships for the Goals”. “The aim here is to take the successes of the Sustainability Code to the next level and enhance the credibility and market relevance of corporate responsibility reporting,” Prof. Dr Günther Bachmann, Secretary-General of the RNE, explains.
“The partnership between Arabesque S-Ray and the Federal Government’s Sustainability Council will improve the quality and availability of ESG data significantly. The Sustainability Code has been a highly popular ‘export’ as companies abroad are now applying it, in addition to their counterparts in Germany. We are delighted the RNE has placed its trust in us and look forward to gathering this data together,” adds Andreas Feiner, Co-Founder of Arabesque.
Over the months to come, the partners will be working on developing an open-data solution for sustainable business. The Code’s database already provides a publicly accessible platform for structured reporting on sustainability topics. Currently, 540 companies in Germany of all sizes and legal forms are applying this reporting standard on a voluntary basis. These include pioneers who have been publicly disclosing their steps towards integrated sustainability management for some eight reporting years now. With around 1,100 Code declarations, the Sustainability Code is well established as a recognised reporting standard. “The task now is to scale up the Code and position it in such a way that it can help shape economic relationships at a global level as well,” comments Bachmann.
The RNE cooperates with a variety of stakeholders such as EcoVadis, the Greek QualityNet Foundation, the Czech Ministry for the Economy and the German Sustainability Award. In its advisory capacity to the Federal Government, the RNE brought the Sustainability Code into being as a reaction to the 2008 financial and economic crisis in dialogue with representatives of the financial market and the corporate sector. It builds on international standards, translates these into focused reporting requirements, is free to use and is, thus, well suited to be applied as a blueprint for implementation throughout Europe as well as globally. The RNE has been managing the voluntary reporting standard since 2012 and has since 2014 been publishing the Code reporting of companies and organisations in a publicly accessible database.
Media Relations
Marijke Eschenbach German Council for Sustainable Development Office c/o GIZ GmbH Potsdamer Platz 10 10785 Berlin Telephone: 030/338424-233 E-Mail: marijke.eschenbach@nachhaltigkeitsrat.de
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string(3360) "Athens, 9th April 2019 – Turkey is about to become the third country with a national Sustainability Code. The Turkish Sustainability Code, the result of a cooperation between the Sustainability Code and the Turkish Center for Sustainable Production Research and Design (SÜRATAM), was announced at the Sustainability Outlook 2019 conference in Athens on 5th April 2019. Dr. Hüdai Kara and Julia Graner, Director and Manager of the Turkish Sustainability Code project, respectively, attended the conference to represent SÜRATAM.
The Sustainability Code, a reporting standard introduced by the German Council for Sustainable Development (RNE) in 2010, is open to independent, country-specific adaptations. According to the RNE, further EU and global parties are interested in the experiences with the Sustainability Code and its options for national adoption along with Turkey who is at an advanced stage of adaption and implementation.
The Sustainability Code and SÜRATAM agreed to cooperate on an adaption of the Sustainability Code at the end of 2018. Currently the Turkish Sustainability Code is at a stage of consultation with stakeholders and work on an adaption of some of the criteria to the local conditions. Relevant stakeholders and actors identified are academia, local and multinational companies, business associations, chambers of commerce, as well as civil society and consultants. The most important activities include networking to interlink relevant aforementioned actors in the development of the Code and researching further cooperation opportunities. Some important milestones including the Turkish translation of the Code and a bilingual web presence have been achieved. The Turkish Sustainability Code team is based in the offices of SÜRATAM and makes use of SÜRATAM’s members and extensive industrial network to further raise awareness of sustainability topics in all sectors and industries.
“The cooperation is a milestone for sustainability reporting in Turkey, where sustainability reporting is voluntary and at a comparatively low level. The Turkish Sustainability Code will serve local companies from small to large as a tool for transparency and assessment on sustainability. The introduction may even lay the foundation for a Code-inspired sustainability index of listed companies based on accepted KPIs and metrics.” says Dr. Kara, a member of the board at SÜRATAM and Director of the Turkish Sustainability Code.
The partnership between the Code and SÜRATAM shows that the contents of the Code are cross-border relevant and applicable. A look at the widely varying standards of sustainability reporting and the growing interest in standardization underlines that an instrument such as the Code, which focuses on materiality, commitment and transparency, can offer a good and feasible option to internationally promote sustainable business practices.
Commenting on the announcement, Yvonne Zwick, Head of the Sustainability Code Office and Deputy Secretary General at the German Council for Sustainable Development noted: “The team in Turkey is laying the foundation to kick start the disclosure of sustainability efforts from companies of all sizes in Turkey. We are delighted to witness the announcement of the Turkish Sustainability Code and welcome them to the Code family.”"
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string(6529) "German Sustainability Code to be expanded to help SMEs in particular report on their sustainability performance.Berlin, 2 April 2024 – Companies should be able to hit the ground running when they come to implement the new standards for sustainability reporting. With this in mind, the German Sustainability Code (DNK) developed by the German Council for Sustainable Development (RNE) is being updated and expanded with, among other things, a new online platform. The Federal Ministry for Economic Affairs and Climate Action (BMWK) will provide 19,250,000 euros in funding over a three-and-a-half-year period in a bid to minimise the time and effort required for sustainability reporting, especially by small and medium-sized enterprises (SMEs). The move is the German government’s response to the expansion of EU-wide reporting obligations, which will result in some 13,000 companies in Germany having to join the reporting ranks from 2025. The DNK enables low-threshold, legally compliant sustainability reporting by means of free and practical support via, for example, an online platform, training courses and guidelines.
Michael Kellner, Parliamentary State Secretary at the BMWK and the federal government’s SME Commissioner: “We must prevent any additional red tape. Our goal is therefore to take as much pressure as possible off small and medium-sized enterprises in particular, as regards their reporting obligations. These include reporting on sustainable business practices. Companies must be able to supply their contract partners and banks with all the necessary sustainability data in standardised form and also make eco- and climate-friendly economic activity transparent to the public. The German Sustainability Code is the key to this. It will provide free, low-threshold digital support for companies to fulfil the new statutory requirements for reporting on sustainability and due diligence. The standardised, digital, user-friendly format offered by the DNK 2.0 will make reporting a whole lot easier.”
Reiner Hoffmann, Chair of the German Council for Sustainable Development: “Sustainability reporting plays an important part in boosting corporate responsibility for environmental and climate protection and human rights compliance as well as gradually course-correcting towards a sustainable economy. It’s not about sanctions – it’s about transparency. The sustainability report is the product, but much more important is the company’s internal process that results from analysing its own activities and value chain. The companies themselves need this data to configure their business models sustainably and competitively.”
Gerd Röders, President of WirtschaftsVereinigung Metalle and managing partner of the foundry G.A. RÖDERS GmbH & Co. KG: “For our business, the DNK was a valuable motivation to get on with preparing our first voluntary sustainability report. The clear structure and good explanations – in the guide and on the platform – make it comparatively easy for users to write their first sustainability report.”
As well as building an online platform for creating and publishing sustainability reports electronically (by the end of 2024), the expanded DNK offering will include a help desk for companies with technical and content-based questions, as well as support through, for instance, webinars and guidelines. The free service is aimed at both companies that are already obligated to report or soon will be, and those who do so voluntarily, who wish to tackle the increasing demands around the issue of sustainability head on. Added to this are companies which, though not legally obliged to report, nevertheless find themselves subject to the information requirements of their contract partners in the value chain. For these businesses, there will be a simplified entry-level module based on the EU’s voluntary SME standard.
More information
Already since 2014, market-listed companies of public interest in the EU have been required to report on their sustainability performance, as regulated by the European Non-Financial Reporting Directive; in Germany this affects approximately 550 companies. The reporting obligation is being significantly expanded by the Corporate Sustainability Reporting Directive (CSRD), which came into effect in January 2023. As a result, the number of companies across the EU that are required to report will gradually increase from 11,600 to 49,000, estimates predict. In Germany, this will affect around 13,000 companies, starting in 2025, when they will be obliged to submit a sustainability report as part of their annual company report. The criteria within the twelve main areas include, for example, measures to preserve biodiversity at company locations, climate adaptation measures and programmes to protect human rights along the value chain. Reporting on due diligence compliance in supply chains as per the EU’s Corporate Sustainability Due Diligence Directive is likewise required under the CSRD.
The present German Sustainability Code (DNK) was developed by the German Council for Sustainable Development (RNE) and has been supporting companies with their sustainability reporting since 2011. The current expansion of the Code is being conducted by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, with ongoing consulting support from the RNE. The purpose of the DNK is to help companies gain low-threshold access to sustainability reporting and meet the corresponding legal requirements. It is already being used by more than 1,200 companies as a reporting tool to publish their sustainability achievements and develop them further.
Press contacts
BMWK Press Office
Scharnhorststraße 34-37
10115 Berlin
Email: pressestelle@bmwk.bund.de
Phone: +49 30 18615 6121 and 6131
RNE Press Office
German Council for Sustainable Development
Office c/o GIZ GmbH
Potsdamer Platz 10
10785 Berlin
Email: presse@nachhaltigkeitsrat.de
Phone: +49 30 338424 529"
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