Sustainable Finance-Committee recommends strengthening of reporting requirements

The German Government’s Sustainable Finance-Committee published its interim report on 5 March 2020. It discusses 53 approaches for the development and the implementation of a sustainable finance strategy for Germany. A suitable data basis is seen as the basis for the desired resilience and transformation of the financial sector. Therefore, a large part of the approaches relates to transparency and disclosure aspects.

Core recommendations include:

• standardisation of non-financial reporting and its connection with financial reporting (integrated reporting),
  
• step by step extension of the scope to also include not publicly traded companies, SMEs and companies of so called high-impact sectors,
• climate stress tests and scenario analyses on a regular basis and
  
• mandatory TCFD reporting for listed companies from 2022.

Furthermore, the Committee discusses:

• extension and specification of non-financial reporting requirements,
• disclosure of a core set of non-financial performance indicators (if necessary, sector-specific) as well as
• disclosure of forward-looking non-financial information,
  
• organisational setting of the standardisation on company reporting in the international context, taking established standard setters into account, and
  
• facilitating the data access by means of a standardised and digitised reporting format and by setting up a generally accessible raw database.

ASCG President Prof. Dr. Andreas Barckow commented as follows:
“With its interim report, the Committee contributes significantly to the debate on the further development of corporate reporting, particularly in light of the current EU consultation on the revision of the Non-financial Reporting Directive. From a German perspective, I think it would be desirable to embed the discussion in an international context in order to avoid national or purely European efforts as far as possible. This applies especially to the issue of disclosure and transparency.”

The Committee seek the views of respondents and invite all interested parties to submit proposals for amendments and additions. The comment period ends on 3 April 2020 and the DRSC aims to comment on the report.