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Journal article – Between mandatory and voluntary: non-financial reporting by German companies

Non-financial reporting by German companies has long been a voluntary matter. As of fiscal year 2017, the CSR Directive Implementation Act makes it mandatory for some 500 large German companies. In an arcticle in the journal Sustainability Management Forum IÖW-scientists Esther Hoffmann, Christian Dietsche and Christine Hobelsberger identify the trends and developments in voluntary reporting before the CSR reporting obligation came into force. The study is based on an analysis of the quality of sustainability reports published by German companies in 2014 and 2015. The article has been published open access.

The number of stand-alone sustainability reports and integrated reports is increasing and companies are orienting, in particular, on the guidelines provided by the Global Reporting Initiative. The scientists find that there is room for quality improvements. Moreover, they show that many reports from companies that are new to reporting are still incomplete in terms of content. They additionally conduct an analysis of non-financial information presented by 522 German companies during financial year 2015 or 2016 that are now subject to reporting requirements starting with financial year 2017.

The study shows that many reports still need further development to meet the requirements of the CSR Directive Implementation Act. Specifically, a more rigorous selection and linking of financial and non-financial information is necessary while other areas for improvement include the descriptions of the policies in use for tracking the relevant matters as well as for handling of risks. The analysis of the current non-financial information also shows that the quality and depth of sustainability-related information is generally greater in stand-alone reports oriented to frameworks such as the GRI4 or the German Sustainability Code than in management reports.

The study was carried out by the IÖW together with the business association Future in the projects Ranking of Sustainability Reports 2015 and Monitoring Project 2017 with funding from the Federal Ministry of Labour and Social Affairs. At the beginning of 2019, the IÖW and Future will publish the results of the Ranking of Sustainability Reports 2018 as well as a renewed monitoring of the CSR reporting obligation.


Bibliographical data:

Esther Hoffmann, Christian Dietsche, Christine Hobelsberger (2018): Between mandatory and voluntary: non-financial reporting by German companies, Sustainability Management Forum, Springer, Berlin/Heidelberg