Sustainability Reporting: Italy, France, and Germany

Disclaimer: this is an automated translation from Italian. Go to the original article.

The CSRD (Corporate Sustainability Reporting Directive) is the European regulation that expands the sustainability reporting obligations for companies. Effective from January 5, 2023, it replaces the previous NFRD (Non-Financial Reporting Directive), introducing more stringent and detailed requirements. The CSRD requires European companies to provide information on the environmental, social, and governance (ESG) impact of their activities, aligning with the European Sustainability Reporting Standards (ESRS). The aim of the CSRD Directive is to improve the transparency, comparability, and reliability of sustainability information, facilitating informed investment decisions and contributing to the goals of the European Green Deal.

With the introduction of the CSRD directive, it is estimated that over 50,000 companies across the European Union will be subject to sustainability reporting obligations, compared to the approximately 12,000 involved by the previous NFRD directive. Key requirements include compliance with European ESRS standards, the adoption of common metrics to measure environmental and social performance, and mandatory data verification by external auditors. This evolution represents a crucial step in standardizing sustainability practices at the European level, improving comparability and reducing the risk of greenwashing. However, the costs of adaptation and the complexity of the regulations pose significant challenges, especially for SMEs. These changes make it essential for companies to adapt quickly, collaborating with experts to ensure compliance and competitiveness.

With the introduction of the CSRD Directive, sustainability reporting has become a priority at the European level, pushing companies to meet new expectations regarding transparency and accountability. The obligation to disclose information on environmental, social, and governance (ESG) issues will progressively involve an increasing number of companies, increasing pressure on all economic entities, from large groups to SMEs. While the CSRD Directive provides common guidelines at the European level, its practical application may slightly vary among different Member States due to local specificities and pre-existing regulations. Although the directive establishes reporting obligations at the European level, each country may adopt measures to facilitate its implementation.

According to an analysis conducted by ConsumerLab on 2,612 Italian companies of the Mediobanca index, 30.3% publish a sustainability report, with sectors such as glass production (70.6%) and telecommunications (63.1%) leading the way. However, sectors such as the wood industry (9.4%) and distribution (10.6%) are lagging behind. Additionally, only 6% of Italian SMEs (50-499 employees) produce a sustainability report, highlighting a significant growth potential in this area. The increased focus on these issues is not only a reaction to growing regulations but also represents a shift in the expectations of stakeholders, particularly investors and consumers, who are demanding more transparency on corporate practices related to environment, social, and governance (ESG).

In France, sustainability reporting is primarily regulated by the "Loi relative au devoir de vigilance", enacted on March 27, 2017. This law requires large French companies to develop, publish, and implement a vigilance plan aimed at identifying and preventing risks of violations of human rights, fundamental freedoms, health, safety of people, and the environment. Alongside this legislation, a fundamental role is played by the French network of the United Nations Global Compact. Its main mission is to support the implementation of the 2030 Agenda and promote the adoption of the 17 Sustainable Development Goals (SDG) by the French economic world. Moreover, France was among the first countries to introduce non-financial reporting obligations for large enterprises, promoting a corporate culture focused on transparency and social responsibility.

In Germany, the "Gesetz zur Stärkung der nichtfinanziellen Berichterstattung" requires all large companies to provide information on environmental, social, and governance aspects. German companies have shown a growing commitment to sustainability reporting, with a significant increase in the number of companies publishing detailed ESG reports. However, in Germany, political tensions are emerging regarding the ambitious climate and sustainability goals set by the European Union. Some German ministries have recently proposed changes to the regulatory framework for corporate sustainability reporting, arguing that the rules under the CSRD (Corporate Sustainability Reporting Directive) are too complex and burdensome for companies and could hinder progress towards greater corporate transparency and accountability.

This article was created as part of the project "Biodiversity services EU expansion" (CUP: E43D22000480009) under the call by the Lombardy Region "PR FESR 2021-2027 – LINEA INTERNAZIONALIZZAZIONE 21-27", aimed at supporting the internationalization of Italian companies. 3Bee is the naturetech company that develops innovative technologies for monitoring, protecting, and regenerating biodiversity, helping companies define customized climate strategies based on the analysis of their impacts and dependencies on nature. With a consolidated portfolio in Italy, Germany, and France and significant partnerships, 3Bee continues its international market expansion to create a concrete impact through technology.