Reporting ESG

The Sustainability Code (DNK)

Jul. 11, 2022

To meet the challenges of sustainable development for society and the planet, the SDGs of the United Nations, the Paris Climate Agreement, and the EU Action Plan were introduced. With them, the issue of sustainability has gained strong momentum.

The facets of sustainable business and reporting are many and varied. To give companies a basis for their daily actions, the German Council for Sustainable Development (RNE) introduced the Sustainability Code in 2012 in dialog with various stakeholder groups.

The meaning and scope of the Sustainability Code

The Sustainability Code (german: Deutscher Nachhaltigkeitskodex, DNK) supports the creation of a sustainability strategy and offers companies an introduction to sustainability reporting. With its 20 criteria, the Code summarizes essential aspects of sustainability in a systematic and compact form. This enables transparency about sustainability performance and thus comparisons about companies’ products and services. The DNK can therefore be used by clients, lenders, and investors as an important aid for risk management and decision-making.

The DNK addresses a broad set of users. This includes organizations of all sizes and legal forms, with and without pre-existing sustainability reporting, as well as companies with a reporting obligation and all organizations that want to inform their stakeholders about their sustainable achievements.

As the Sustainability Code takes up existing international reporting standards, it is also applicable to globally active companies or companies in countries other than Germany.

DNK Sustainability Code

The Sustainability Code takes international standards and regulations into account

In order to comply with the Sustainability Code, an organization has to declare conformity with all 20 criteria and the non-financial performance indicators from the Global Reporting Initiative (GRI) and the European Federation of Financial Analysts Societies (EFFAS).

However, the Code can be used not only as a stand-alone framework but also as an overarching one. This is because the Sustainability Code additionally adopts an international cooperation approach and thus aims to promote the transparency and comparability of companies' sustainability performance at the global level.

The Sustainability Code takes into account:

  • The EU Taxonomy, as adopted by the European Commission in 2020

  • The CSR Directive Implementation Act (CSR-RUG), as adopted by the German federal parliament in 2017

  • The National Action Plan for Business and Human Rights (NAP), as adopted by the German federal government in 2016

With the Code and its explanations, the RNE provides clear guidance on how to prepare non-financial reports to comply with the CSR reporting (CSR-RUG) and EU Taxonomy obligations, as well as on how to disclose complementary reporting elements regarding the National Action Plan for Business and Human Rights.

CSR Directive Implementation Act (CSR-RUG) at a glance

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What is the EU Taxonomy and which companies are required to report?

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The power of science-based targets (SBTs): Achieving sustainability goals

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