Bundestag election 2025: What does this mean for the implementation of the CSRD in Germany?

Germany has decided: Last Sunday, the country elected a new federal government after the traffic light coalition failed. The 2025 federal election will not only determine Germany’s political future, but will also have a significant impact on the economy and sustainability regulations. The Corporate Sustainability Reporting Directive (CSRD), which obliges companies to provide comprehensive sustainability reporting, is particularly relevant. This has not yet been transposed into national law, and with the ongoing discussion about the omnibus initiative, which is intended to further simplify the CSRD, it remains uncertain how the directive will ultimately be implemented in Germany.

What is the CSRD?

The CSRD is an EU directive that obliges companies to report in detail on sustainability aspects. It replaces the previous Non-Financial Reporting Directive (NFRD) and extends the scope of application to a larger number of companies. The aim is to increase transparency and provide investors and stakeholders with well-founded sustainability information. Germany has already taken the first steps towards implementing the CSRD and submitted a government draft, but the final regulatory form will also depend on the political situation.

Outcome of the 2025 federal election and impact on the CSRD

The 2025 federal election has resulted in a new government that will have a significant impact on the implementation of the CSRD. The results of the election and their consequences:

  • CDU/CSU strongest force with 28.52 %: Chancellor candidate Friedrich Merz will have to form a coalition in order to govern. The CDU/CSU has spoken out against the CSRD and wants to “put a stop to burdens” when it comes to the CSRD and taxonomy. Their climate policy is based on market-based mechanisms such as emissions trading and the use of all climate-friendly energies, including nuclear energy. They want to abolish the Supply Chain Act.
  • AfD second strongest party with 20.8 %: The party gained significant influence in eastern Germany in particular. As the AfD takes a critical view of environmental and sustainability requirements, this could lead to resistance to CSRD regulations. The party generally rejects climate protection measures and continues to rely on fossil fuels. It also wants to reduce the burden on companies by cutting red tape and sees reporting obligations as an unnecessary burden.
  • SPD now only third strongest with 16.41%: The Social Democrats need to regroup, which could weaken their position in potential coalition talks. They are committed to the European climate targets and focus on a secure, affordable energy supply through renewable energies. They also want to explicitly support companies in switching to climate-friendly technologies and are in favor of the EU Supply Chain Directive.
  • Greens with 11.61 %: Losses, but still a relevant player for coalition negotiations. They want the CSRD to be transposed into national law quickly and are committed to simplifying the ESRS standards. They support the EU Supply Chain Directive and are also calling for ambitious climate protection targets and the massive expansion of renewable energies.
  • Left with 8.77 %: Surprising comeback, could campaign for social aspects of sustainability reporting. It is calling for more ambitious climate targets and greater state intervention in the economy. They also want more transparency regarding the social and environmental impact of companies and a strengthening of the Supply Chain Act. They want to make Germany climate-neutral by 2040.
  • FDP and BSW not in the Bundestag: The FDP failed to reach the five percent hurdle with 4.33%, as did the Sahra Wagenknecht alliance with 4.97%.

Possible scenarios after the election

Merz is aiming to form a government by Easter. The CDU/CSU has consistently ruled out a coalition with the AfD, and the Left Party is also unlikely to be part of the government as it wants to position itself as a strong opposition. Depending on the coalition formed, the following scenarios may therefore arise for companies:

  1. CDU/CSU and SPD (grand coalition): Most likely coalition with a moderate implementation of the CSRD. While the CDU favors business-friendly adjustments, the SPD could push for consistent compliance with EU requirements.

  2. CDU/CSU, SPD and Greens (Kenya coalition): Here, a stronger focus could be placed on climate protection and sustainability regulations, which could mean stricter implementation of the CSRD.

Recommendations for companies

Even if the situation is uncertain at the moment, companies should still act proactively in order to be as well prepared as possible for the implementation of CSRD. Preparing for the CSRD also offers companies numerous opportunities: increased transparency and credibility can strengthen their reputation, while customers and investors increasingly value sustainability and prefer ESG-compliant companies. In addition, companies that are actively committed to sustainability have better chances of receiving funding programs. In addition, the systematic collection and analysis of sustainability data enables a more targeted identification of optimization potential within the company.

It is therefore advisable for companies to make so-called “no-regret moves” now in order to position themselves in the best possible way regardless of future regulations:

  • Clarify responsibilities: Define clear responsibilities for sustainability reporting within the company. Responsible teams and individuals should be named at an early stage.
  • Double Materiality Assesment (DMA)This analysis forms the basis of the CSRD and provides valuable strategic insights that can also be used beyond the CSRD. You can use our Excel template for materiality analyses or the Materiality Master Software.
  • Write a CSRD test report: The ESRS VSME standard offers a simplified reporting option. Companies can test it voluntarily in order to prepare for future sustainability reporting.
  • Revise supply chain strategy: Parties such as the CDU/CSU reject strict requirements, while the SPD and Greens are backing consistent implementation. Even if the political situation here is not yet entirely clear, consumers are paying more and more attention to sustainability in the supply chain. Companies should therefore optimize their supply chain compliance at an early stage.
  • Adapt climate strategy: The new government is expected to adapt CO2 reduction and energy efficiency measures. Early investment can bring long-term benefits.
  • Monitor regulatory developments: Sustainability reporting and ESG requirements remain a dynamic field. Companies should follow current debates and legislative changes. Our “CSRD Compass” newsletter keeps you regularly informed about the most important updates.
  • Use networks and further training: Regular updates through webinars, specialist networks and expert forums help you to react to regulatory changes at an early stage.

Conclusion

The 2025 federal election has reshaped Germany’s political landscape and will have a significant impact on the implementation of CSRD. Companies should prepare proactively and follow political developments closely to avoid being surprised by regulatory changes. Early action can not only minimize risks, but also create long-term competitive advantages.