German companies are particularly detailed when it comes to sustainability reporting. This is shown by an analysis of 106 sustainability reports from companies in 18 countries by the management consultancy Kirchhoff Consult. The reports follow the Corporate Sustainability Reporting Directive (CSRD) and the associated European Sustainability Reporting Standards (ESRS).

The 26 reports from Dax companies comprised an average of 148 pages. The companies from the other 17 countries, on the other hand, managed with an average of 116 pages of text. In order to compensate for distortions due to language, the English-language publications were selected and their content translated into standard pages.

Both positive and negative arguments can be found to explain the wider scope. A favourable interpretation could be that German companies are already well positioned in sustainability management and pursue a particularly high standard of transparency. However, this is probably only a small part of the explanation, says Julian von Pressentin, Director ESG and Sustainability at Kirchhoff Consult.

He assumes that high auditor requirements in Germany are a key driver for the longer reports, saying that "in our consulting practice, we see that the auditor's requirements sometimes even go beyond the information required by regulation.“ It is true that one can talk to the auditor about additional required disclosures and possibly eliminate them. However, this requires detailed knowledge in order to be able to hold a discussion. Companies often comply with the requirements so as not to jeopardise being signed off. However, this is not what the regulations want, says the consultant: „What is explicitly required is concise information so that the key information in the report is clearly recognisable.“

According to the analysis, the extensive scope of reporting by German companies cannot be explained by a broader range of topics. The information is based on the principle of „double materiality’: companies must report on the impact of their business operations on the environment, but also on the impact of sustainability aspects on their own business activities. On average across Europe, companies have categorised seven topics as ‘material“ in their reports. The most common of these are climate change, and corporate governance.

At 7.5, the number of aspects categorised as material by German companies was only slightly higher than the European average of 6.7 – the longer reports therefore did not contain more topics despite being 27% more comprehensive.

However, individual companies also address those topics that they do not consider to be „material’: "Hochtief, for example, has added a multi-page table in which the company explains why it categorises certain topics as „not material“,“ explains von Pressentin. In the standards for mandatory reporting, however, this information is explicitly labelled as optional. Most companies do without this in order to reduce the volume.

If individual details are of interest for ratings, for example, they are often published separately or listed in the appendix of the annual report so as not to dilute the focus of the sustainability report.

Von Pressentin also believes that limiting the sustainability report makes sense for cost reasons, saying „every additional page costs time and money.“ Companies have to plan resources for collecting the data and preparing the report, plus costs for consultants, layout and ultimately auditors. "That quickly adds up to seven-figure sums,“ he says.

In his opinion, the addressees also need a clear focus: „Hardly any analysts are likely to have the time to work through 250 pages of sustainability report,“ says the consultant. He was impressed by Novo Nordisk's CSRD report: „It was recognisably written for investors and was limited to around 50 pages.“ Von Pressentin believes that the maxim more is better is the wrong guiding principle for sustainability reports. „I would rather say: less is more", he says.