Since 2017, capital market-oriented companies (as well as banks, insurance companies and investment companies) with more than 500 employees and an annual turnover of more than 40 million euros have been required to publish a sustainability report in which they explain how they meet social requirements in terms of environmental protection and resource conservation, employee protection, human rights, combating corruption, and diversity.
With increasing pressure to act, the EU Commission proposed far-reaching changes regarding sustainability reporting in 2021 and thus launched the Corporate Sustainability Reporting Directive (CSRD). The CSRD tightens the reporting obligation and provides that in future all companies with more than 250 employees are to be included - regardless of whether they are listed on the stock exchange or not. The CSR reporting obligation and thus also the CO2 reporting obligation are to apply for the first time to all management reports published from 1 January 2024.
We answer the most important questions about the upcoming corporate sustainability reporting obligation.
1 What is a sustainability report anyway?
A sustainability report summarises the progress of a company from three different points of view. In addition to ecological sustainability, this also includes social and economic sustainability. The sustainability report should integrate topics such as environmental, employee and social concerns as well as human rights and corruption and present the development of key figures. The report also presents the corporate sustainability goals along with the measures to achieve them.
2 What does the CO2 reporting obligation mean?
As part of the new CSR reporting requirement, information on company greenhouse gas emissions is included in the sustainability report. This means employers must now start recording and reporting the CO2 emissions of their employees. This mainly concerns the area of mobility and applies to both the way to work and all business trips. The measurement and reporting obligation applies to every organisation with 250 or more employees and comes into force on 1 January 2024.
3 Why are employers asked to report CO2?
CO2 emissions must be drastically reduced. The German government has set itself the goal of reducing German greenhouse gas emissions by 55% by 2030 compared to 1990. With their immense energy and electricity consumption, companies have a social responsibility and play a central role in the reduction targets and the implementation of measures.
4 Why is there CO2 tracking and reporting specifically for mobility?
The transport sector is responsible for about 20% of all CO2 emissions and while greenhouse gas emissions in Germany have decreased since 1990, there have been hardly any improvements in the transport sector. This was and continues to be mainly due to road traffic and thus private motorised transport. In order to achieve the climate goals of the EU and Germany, companies and employers also have a social duty to make a contribution and find measures to reduce CO2 emissions.
5 How many companies will have to report these figures?
The CSRD significantly expands the existing framework for non-financial reporting. All companies listed on an EU-regulated market (with the exception of micro-enterprises) are affected by the new reporting obligation. In addition, all non-capital-market-oriented companies are covered by the CSRD if they fulfil two of the following three criteria:
It is estimated that this affects around 50,000 companies in the EU, 15,000 of which are in Germany.
6 Which employees should I include in the notification?
All employees with an employment contract of at least 20 hours per month.
7 What must be reported?
A report on the total number of commuting and business kilometres travelled by employees must be submitted annually. Record total mileage, means of transport used, fuel type. Note that this includes both employees' own and company vehicles.
8 Should I include distances travelled abroad in the report?
No, only journeys within Germany should be indicated.
9 How do I report journeys with several modes of transport?
For simplicity, the total distance of all means of transport can be added up and the sum entered under the transport category in which the greatest distance was travelled.
10 Where does the reporting take place?
Sustainability reporting must be included in a separate section of the management report.
11 Who audits the sustainability report?
In future, the sustainability report must be submitted to the existing auditor (= statutory auditor) or an independent service provider.
12 What happens if I do not report?
It is likely that your company will be asked to do so or be fined.
13 What can I do to reduce CO2 emissions from mobility?
Take measures to encourage less travel or more environmentally friendly modes of transport.
You can achieve this with the following measures, for example:
14 Which measures have the greatest impact if I want to reduce mobility-related CO2 emissions?
A combination of measures is best. Most emissions come from car kilometres, which need to be reduced and replaced with cleaner kilometres (bicycle, public transport, electric). Above all, look at what you can do to reduce CO2 emissions from commuting. This is about 85% of total mobility emissions.
15 When will the CO2 reporting obligation come into force?
The new regulations on sustainability reporting will be applied in three stages:
SMEs will also be granted an exemption ("opt-out") during a transition period, i.e. they will be exempt from the application of the Directive until 2028.
16 When is the first report due?
For most as described above, from 1 January 2025. Reporting will then be for the previous year (from 1 January 2024).
17 Is there a template for sustainability reports?
Currently, there are various national as well as international standards to which companies can orient themselves. None of these standards is legally required, but reporting companies that do not apply an established standard must justify this.
18 How do I compile all the data I need for the report?
You can compile this data yourself from company records. This includes annual invoices for leased vehicles, season tickets for public transport, mobility services and kilometre invoices. Missing data can be completed, for example, through an employee survey.
Solutions such as the NAVIT mobility budget platform help you to record CO2 data. All trips with the mobility budget are automatically and digitally recorded and the resulting CO2 emissions are calculated directly. In addition, reports can be easily created. This allows you to significantly minimise the administrative effort for sustainability reporting in the area of mobility.
19 What can NAVIT do for me?
NAVIT offers the following advantages, among others:
20 Is it possible to record employee journeys without an app solution?
It is precisely to minimise the administrative effort and make sustainable travel as easy as possible that the app solution is necessary. Trips outside the mobility budget cannot be recorded.
21 What does reporting mean for the privacy of employees?
Safeguarding the data protection of employees is an important prerequisite. Employers only report the total figures for the whole company, not for each individual person.
22 I have further questions about the CO2 reporting obligation, who can I contact?
If you still have questions or would like more information, you are welcome to contact our mobility experts. Simply book a call with us. We are there to help you!
