8.6 Voluntary sustainability reporting by companies according to the German Sustainability Code (DNK)
The German Sustainability Code (DNK) was originally designed as an independent reporting standard, offering companies the opportunity to make their sustainable practices transparent and comparable with other companies. It was also intended to help align investment and purchasing decisions with sustainability criteria. Due to developments at the European level, the DNK has evolved into a support tool for implementing the European reporting standards.
Since 2017, certain companies in Germany have been legally required to produce sustainability reports. This obligation arises from the European CSR Directive (Corporate Social Responsibility) and its national implementation through the CSR Directive Implementation Act (CSR-RUG). The directive sets both formal and content-related requirements and defines which companies are subject to reporting. As part of the European Green Deal, the directive was revised in 2022 – now called the Corporate Sustainability Reporting Directive (CSRD) – with a phased expansion of the reporting obligations and the number of companies affected starting from 2025. However, at the time of this publication, the planned extension of mandatory sustainability reporting is still under discussion by European institutions and may be revised or softened. On 26 February 2025, the European Commission presented the so-called Sustainability Omnibus Package, which includes, among other things, a limitation of the CSRD’s scope.
At the same time, the European Commission announced that it would introduce a separate standard in 2025 for voluntary sustainability reporting by companies – the Voluntary SME Standard (VSME). This standard is aimed at companies that are not subject to CSRD reporting requirements themselves but need to meet information demands from business partners within value chains or from capital markets.
The indicator for voluntary sustainability reporting captures the number of such companies that are not yet CSRD-reporting entities but have submitted sustainability reports to the DNK. Restricting the indicator to DNK submissions ensures transparent data availability and avoids mixing or double-counting among reporting standards. However, this limitation also means the indicator’s significance may be constrained, as it only considers one of several possible standards, even though others may serve a similar purpose. It should also be noted that the number of DNK reports submitted does not provide a direct measure of the actual extent of sustainable business practices in German companies but merely reflects the quantitative scope of sustainability reporting under the DNK.
Large companies with corresponding mandatory reporting obligations are not included. The voluntarily submitted reports from the remaining companies are counted unweighted in the indicator, regardless of their size, economic sector, or potential impact of their sustainability activities.
In total, 462 companies submitted reports in 2023. Compared to previous years, the indicator shows no clear trend: 532 reports were recorded in 2022, while only 407 reports were submitted in 2021. It is also important to note that some of the submitted reports do not specify whether the companies are already subject to reporting obligations. In 2023, this applied to 43 reports, which may also come from companies reporting voluntarily. The majority of reports in 2023 were submitted by smaller companies. 256 reports – more than half of the total indicator value – came from companies with fewer than 250 employees. Additionally, 69 reports came from companies with 250 to 499 employees, and 102 reports from companies with 500 to 4,999 employees.
A possible expansion of the reporting obligation under the CSRD is expected to have far-reaching effects on the number of companies voluntarily producing sustainability reports. On the one hand, larger companies subject to the reporting requirement will likely demand sustainability information from their suppliers. This could lead smaller companies within value chains to be encouraged to report on sustainability, even if they are not officially affected by the expanded reporting obligation. On the other hand, companies that have previously reported voluntarily through the DNK will drop out of this indicator’s count once they become directly subject to the expanded reporting requirements and therefore no longer report voluntarily.
