The forty Dax constituent companies are better prepared for sustainability reporting than they were a year ago, according to an analysis by auditing firm Forvis Mazars. The analysis assessed the companies' non-financial reporting via a questionnaire, and looked at publications such as sustainability reports for the fiscal year 2023. It assessed how well the companies are prepared for the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS).

In simple terms, the CSRD provides the framework for sustainability reporting, while the ESRS defines the content to be reported. Starting in the 2025 reporting season, Dax-40 companies will be required to disclose sustainability information related to the fiscal year 2024, in accordance with the CSRD.

Despite the progress, none of the reports reviewed fully meet the CSRD requirements. According to the report, all Dax-40 companies need to „significantly adjust“ their reporting. „Now it gets serious“, emphasises Moritz Sckaer, a partner at Forvis Mazars. Nonetheless many Dax companies have already made preliminary efforts, and are among the most experienced organisations in Germany regarding non-financial reporting.

For instance, 38 of the 40 Dax companies adhere to the well-established sustainability reporting standards of the Global Reporting Initiative (GRI). The authors of the study see the GRI as providing a good starting point for ESRS reporting. Generally, companies with higher market capitalisation tend to achieve better CSRD readiness scores. In addition to their experience with sustainability issues, they can allocate more resources and funds to the topic.

The study authors positively noted that most Dax companies report their Scope 3 emissions, which include greenhouse gas emissions occurring in the upstream and downstream value chain, such as emissions from the transportation of products sourced from suppliers.

These connections are challenging to capture, especially with international supply chains. „The fact that 34 of the Dax-40 companies already disclose Scope 3 emissions suggests that effective data collection processes have been implemented“, the authors conclude.

Under the CSRD, sustainability reporting will be on par with financial reporting, therefore sustainability information will also need to be externally audited. Initial steps have already been taken: 37 of the 40 Dax companies currently have their non-financial statements or reports externally audited. However, none of these audits are fully based on the relatively new ESRS, with only five companies implementing individual elements of the ESRS.

In other areas, the companies still have significant gaps. For example, only 15 of the Dax-40 have developed a transition plan outlining how they aim to achieve climate neutrality by 2050. The plan is intended to ensure that the business strategy aligns with sustainable practices, and helps limit global warming to 1.5 degrees Celsius.

Dax companies are also less transparent regarding the disclosure of remuneration parameters such as the gender pay gap. Only eight companies provide information on this. In France and the UK, there is already a mandatory disclosure of the gender pay gap, the authors point out. „Thus, reports from Dax-40 companies already include the disclosed metrics for these countries. But the disclosures generally apply only to the UK and France, and rarely cover the entire company.“