The EU wants companies to report in detail on how their business activities and sustainability are related. The details of the new reporting standards that have been made public so far are causing horror in the German economy.
“There is a risk of a huge, inefficient and unnecessary wave of bureaucracy rolling towards medium-sized companies,” warns Thilo Brodtmann, general manager of the mechanical engineering association VDMA. A report commissioned by the employers’ association BDA, which is available to WELT AM SONNTAG, certifies that the detailed proposals of the European Financial Reporting Advisory Group (EFRAG), an EU expert group, also have significant shortcomings.
“The standards presented by EFRAG disregard or exceed the framework set by EU law in many respects,” writes Tübingen law professor Martin Nettesheim in the previously unpublished report. “The reporting obligations formulated by the directive are inadmissibly overstretched in various areas by the EFRAG.”
For example, when it comes to social reporting, the experts demanded that companies report on the accommodation of their employees, their social security and the improvement in their general living situation. His conclusion: the EU Commission would be exceeding its powers if it adopted the ideas of the experts unchanged.
In business, there is also a lack of understanding that the EU is not waiting for developments at international level. The newly established International Sustainability Standards Board is currently developing global rules. “If standards are worked on in parallel at European and international level,” says CSU MEP Markus Ferber, “there is a great risk that the results will not match and that European companies will have to meet two types of standards.”
The Association of German Banks (BdB) also fears this. “So far, it has been customary for international standards to be transposed into EU rules for reporting obligations and to be supplemented to a limited extent by the EU’s own rules,” says Adrian Schwantes, Sustainable Finance Expert at the BdB. “We would also like to see the same with regard to the reporting requirements for sustainability issues.”
