Management Report Sustainability Statement

Under the Corporate Sustainability Reporting Directive (CSRD), sustainability reporting must be integrated into the management report. Whereas the earlier law under the NFRD still allowed an optionally separately published non-financial statement, the CSRD requires a clearly delineated sustainability section within the (consolidated) management report. This puts sustainability information on an equal footing with financial reporting: the same reporting period, the same scope of consolidation, the same responsibility of the legal representatives, and assurance by the statutory auditor.

In terms of content, the sustainability section must follow the structure prescribed by the European Sustainability Reporting Standards (ESRS): general disclosures (ESRS 2), followed by the topical standards on environment (E), social (S) and governance (G) that have been identified as material on the basis of the double materiality assessment. The disclosures must be gathered along the entire value chain and digitally tagged in line with the ESRS/ESEF taxonomy (tagging in XHTML format), so that the information is machine-readable and linked with the financial disclosures in the single electronic reporting format.

In Germany, implementation runs through Sections 289b et seq. and 315b et seq. of the Commercial Code (HGB); the CSRD implementation act specifies the requirements for placement in the management report and for assurance (initially limited assurance). In practice, integration means that the sustainability and finance functions must work closely together: identical reporting dates, aligned internal controls, audit-ready data provenance, and a governance framework ensuring that the ESG statements in the management report are as robust as the audited financial figures.