Germany Asks EU to Ease Green Reporting Rules Amid Downturn
(Bloomberg) -- Germany has asked the European Union to soften its rules on sustainability reporting for companies as the bloc’s largest economy grapples with a downturn.
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Berlin is calling for the EU’s Corporate Sustainability Reporting Directive to be postponed by two years and to exempt small- and medium-sized firms from the reporting duties, according to a letter seen by Bloomberg.
The push comes as the German economy is projected to shrink for a second straight year due to dwindling demand from export markets like China and still very high energy prices following Russia’s decision to stop gas deliveries in the wake of its full-scale invasion of Ukraine.
Changes are needed “in order to avoid unnecessary burden for businesses,” says the letter dated Dec. 17, adding that the reporting thresholds should be increased with regard to net revenue, balance sheet and total employees. “We thus call upon the new Commission to come forward with rapid and tangible regulatory measures.”
The request, sent to European Commissioner for Financial Services Maria Luis Albuquerque and European Commission Executive Vice-President Valdis Dombrovskis, was signed by four ministers of Chancellor Olaf Scholz’s coalition government, including Vice Chancellor and Economy Minister Robert Habeck from the Greens.
The other signatories include Finance Minister Joerg Kukies and Labor Minister Hubertus Heil, both members of Scholz’s center-left Social Democrats, as well as Justice Minister Volker Wissing, who decided to leave the business-friendly Free Democrats in November.
An Economy Ministry spokesperson confirmed that Habeck signed the letter, aiming to support efforts by European Commission President Ursula von der Leyen to streamline the various regulations on sustainability reporting, the EU Taxonomy and the EU Supply Chain Directive. The fundamental objectives of the Green Deal are not to be compromised in this process, the spokesperson added.
Von der Leyen had announced her initiative to cut red tape last month.
Scholz’s three-party ruling coalition lost its voting majority in the Bundestag in November, when the chancellor fired Finance Minister Christian Lindner of the Free Democrats over ongoing disputes about more debt-financed government spending.
The German parliament on Monday cleared the way for early elections in February, with Scholz deliberately losing a confidence vote in the Bundestag. The polls are expected to take place on Feb. 23, seven months ahead of schedule. Scholz’s minority government will remain in place until a new one is formed.
--With assistance from Petra Sorge.
(Updates with comments from letter in fourth paragraph)
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