Making Sustainable Finance Work in Germany
Supporting the implementation and increasing the impact of Sustainable Finance regulation
August 19, 2024
Negative narratives and implementation challenges currently stand in the way of realising the full potential of sustainable finance policies like the Corporate Sustainability Reporting Directive (CSRD). With this project we aim to reduce such barriers and contribute to making sustainable finance work in practice. In a pilot study with firms, financial institutions and policy makers in Germany, we enable firms to access benefits beyond compliance, including for example enhanced strategic management of sustainability risks and impacts, better access to (transition) finance and improved business relationships. Additionally, to change the narrative that sustainability standards are simply a burden, we bring to the public the success stories of firms who already use sustainability reporting voluntarily and strategically.
The pilot study is funded by the Mercator foundation, and our narrative work is funded by the Mercator foundation and the Deutsche Bundesstiftung Umwelt (DBU).
The Pilot Study
Bridging gaps and building solutions to make sustainable finance work in practice
In cooperation with the three German SMEs from the food sector BIO COMPANY, followfood and Terra Naturkosthandel, financial institutions and policy makers, we tackle the key pain points of CSRD implementation, co-develop scalable support formats and solutions, and make the strategic benefits of sustainability reporting more visible and accessible for firms in Germany.
- We act as a sparring-partner for firms motivated to implement sustainable finance regulation and gain insights on key pain points that policy makers need to address.
- We facilitate information exchange between large firms and SMEs in their supply chains to demonstrate how to tackle data challenges related to value chain reporting.
- We support the dialogues between corporate and financial sector actors to facilitate the financing of credible transition plans.
- We channel project insights into policy making processes to support continuous improvement of sustainable finance regulation and the support of its implementation.
We have established a high-level project Advisory Board with policymakers, representatives from government authorities and ministries, financial institutions, academia, corporate representatives, industry associations, and audit organisations. They will focus on addressing regulatory gaps and practical challenges in sustainability reporting and delivering actionable recommendations for policy improvements.
These are the confirmed members of our Advisory Board (in alphabetical order):
- Katharina Beck (Bündnis 90/Die Grünen, Member of the German Bundestag)
- Maral Koohestanian (Volt, City Council Wiesbaden)
- Dr. Susan Krohn (German Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection, BMUV),
- Prof. Dr. Andreas Löschel (Ruhr University Bochum),
- Verena Menne (Forum for Sustainable Investment, FNG),
- Katrin Peters (Auditing Firm for medium-sized companies, Nexia),
- Ulrike Schaal (Federal Association for Organic Food and Natural Goods, BNN),
- Prof. Dr. Frank Schiemann (University of Bamberg),
- Silke Stremlau (Chairwoman of the Sustainable Finance Advisory Board of the German Federal Government),
- Katarin Wagner (Forum for Sustainable Development of the German Economy e.V., Econsense),
- Armand Zorn (SPD, Member of the German Bundestag).
Changing the Narrative
Sharing the success stories of sustainability frontrunners
We help firms share their success stories to inspire peers and shape the narrative from reporting “burden” to “opportunity”.
- We support 10+ pioneering companies of different sizes and from different industries in developing and preparing their unique success stories
- We use their input to craft practical case studies, briefings, and presentations for journalists and media professionals that give an honest account of the implementation challenges, opportunities and the scientific backing behind transitioning to sustainable business practice.
- We organise workshops for local, industry-specific, and national media that explain how sustainability standards are handled in corporate practice.
- We contribute to a constructive, fact-based discourse on sustainability reporting that goes beyond emotional debates.
Our current sustainability champions are (in alphabetical order):
Why?
Tapping into the power of transparency
Sustainable finance can only deliver its full potential when transparency is ensured. Investors, customers, and policymakers need reliable data on companies’ sustainability risks and impacts to make informed decisions. Disclosure rules like the CSRD and the European Sustainability Reporting Standards (ESRS) are critical because they not only improve decision-making but also drive better corporate behaviour – firms anticipate stakeholder sustainability preferences and act accordingly.
Yet, recent efforts to “simplify” regulation risk undermining transparency. Calls to cut obligations in the name of competitiveness give the impression that companies in Germany are opposed to sustainability. This paints an incomplete picture of reality. We work with German SMEs who struggle with the complexity of regulation but are eager to carve out the business case of sustainability. Our project supports these companies, amplifies their voices and showcases that sustainability is not a burden but can be an opportunity.
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