The traditional financial reporting in a balance sheet and profit and loss statement does not capture non-financial performance, even if it is significant for sustainability. In a society where sustainable actions are increasingly demanded, traditional reporting is insufficient. Therefore, the Council for Sustainable Development has developed a cross-sectoral and independent code that is applicable regardless of legal form and size. The unified approach of this code allows for comparison of sustainability performance statements. Chancellor Olaf Scholz acknowledges the registration of 1,000 companies with the German Sustainability Code as a significant contribution towards transparent reporting for a sustainable economy globally. The Council has also provided a guide for applying the code, which serves as a reference for existing users and those who wish to become users. The code makes sustainable activities comparable, providing transparency on non-financial performance. The code requires users to explain their performance based on predefined criteria related to environment, employees, company strategy, and management. This information provides analysts and other stakeholders with insights that cannot be obtained from financial reports, particularly regarding a company’s contribution to global sustainability goals such as the Paris Climate Agreement. The clear structure of this reporting instrument is beneficial for the capital market and society as a whole, and industry-specific versions are now available. Chancellor Scholz further emphasizes that it is a great success that companies of all sizes voluntarily and transparently report on their activities based on the criteria of the German Sustainability Code, serving as “pioneers of change.” More companies are recognizing the benefits of this modular, simple, and free-to-use instrument, not only within Germany but also internationally. The German Sustainability Code has been adapted in Greece and is available in multiple translations, including Arabic, Chinese, English, French, Hebrew, Russian, Spanish, Czech, and Romanian. Larger companies have a legal obligation to report on environmental, social, and employee-related issues, as well as human rights and anti-corruption measures, according to the EU Directive 2014/95/EU. Corporate sustainability reporting is regularly updated.
https://www.bundesregierung.de/breg-de/aktuelles/1000-anwender-des-dnk-2183488