Germany’s Buschmann wants to re-open EU sustainability reporting rules negotiations

Germany’s Justice Minister Marco Buschmann wants to reopen negotiations on the EU’s Corporate Sustainability Reporting Directive (CSRD) according to comments on Friday (27 September), one day after Germany and 16 other EU countries received a yellow card from the Commission for missing deadlines to transpose the rules.

Echoing recent criticism that increasing EU sustainability rules hamper the continent’s global economic competitiveness, Buschmann (FDP) told a conference organised by the German Chamber for Industry and Commerce (DIHK) on Friday, “We have to use the period until full CSRD implementation to renegotiate.”

The CSRD, adopted in 2022 and entering into force in January 2024, amended the bloc's previous framework for non-financial companies sustainability-related disclosures, bringing a wider set of companies into the scope of the rules.

The implementation of the rules is meant to be phased in over two years, with smaller companies starting to report on their 2026 activities in 2027.

On Thursday, however, the Commission sent a formal warning to the governments of 17 EU countries—including Germany, Spain, the Netherlands, and Austria—for not transposing CSRD rules by the official 6 July deadline.

An uphill battle or an 'early campaign move'?

In the meantime, though, in its 2024 work programme, the Commission included the CSRD in a list of measures it aimed to review as part of its high-ranking priority of easing the regulatory burden for corporates, and small and medium firms in particular - more specifically, by cutting reporting requirements  by 25%.

In the case of the CRSD, this translated into proposals to postpone deadlines for certain sectors, as well as for non-EU-based companies, by two years, from 2024 to 2026 - a delay that was consequently approved by the Parliament and member states in August.

Nevertheless, Buschmann told the Berlin conference: “Sometimes I feel like Sisyphus, rolling up the stone. Once I am at the top, [EU Commission President] Ursula von der Leyen smiles at me and rolls the stone back down again.”

He pointed to a measure adopted by the German parliament on Thursday that he expected would curb total compliance costs for domestic companies by around €1 billion, and warned this measure could be jeopardised by the effects of increasing EU legislation.

The impact assessment of the CSRD showed that, for example, its national implementation would cause new compliance costs of €1.6 billion for German companies, he said.

Christian Petry, however - a lawmaker of leading government party SPD (S&D) - told Euractiv that this was a "pure FDP initiative”, rather than from the government coalition, and should be seen as “early campaign move” for next years’ federal election.

'A technocratic process'

From his part, Buschmann also criticised the imposition of the CRSD for the alleged lack of wider discussions and negotiations around the final rules, pointing to a “very technocratic process”.

In the European Parliament, the German politician went on to say, often only a small group of negotiators would discuss laws, “without debate in the [political] groups”.

Hildegard Bentele (CDU, EPP), however, the only member of the European Parliament (MEP) present at the Berlin event on Friday, countered Buschmann's statements as based on a “wrong image of rapporteurs.”

“They are negotiating on behalf of their groups," she told Euractiv at the sidelines of the conference, "[so] they always have to get back to them, and the groups still form their own opinion about the results of the rapporteurs negotiations.”

Meanwhile, Richard Gardiner, head of EU policy at the World Benchmarking Alliance - a private-sector initiative to map corporate progress towards reaching sustainability goals - chastised Buschmann's arguments as untenable.

"That there was a lack of public debate is nonsense. The liberals and the centre-right withdrew from these discussions in the Parliament. They refused to openly debate this -like with [other] key files - and now they are crying they don't like the result," Gardiner told Euractiv.

He argued that "the lack of constructive engagement" from certain political groups led the Commission to "obscure commitments" of reducing the administrative burden by 25%.

"This has only added to the confusion as people try to figure out what 25% actually means, instead of actually trying to understand what reporting is needed and where clear overlaps are," he said.

Involved too little, too late?

Views voiced at the conference on Friday partly took aim at Gardiner's comments with multiple German entrepreneurs and politicians saying they would get involved too late in the EU lawmaking process once the national implementation process of EU laws kicks in.

“When we as DIHK tell our members to watch out, something is coming [from the EU level], everyone knows it will take five years before it reaches companies in Germany,” said Martin Wansleben, the DIHK’s managing director.

“Then everyone in Germany has other things to do than worry about what's coming in five years' time,” he said. “And when it finally arrives in five years, everyone says: ‘Oh, where were we?' ” he continued.

“We basically need to get involved in this process earlier,” Martin Plum, German lawmaker for conservative CDU (EPP), said.

“We must try to exert influence and prevent the worst from happening even before the Commission's proposal is in the world,” he added.

Additional reporting by Anna Brunetti and Nick Alipour

[Edited by Anna Brunetti/Alice Taylor]