Bundestag election 2025: What does this mean for the implementation of the CSRD in Germany?
The 2025 federal election and its impact on the implementation of CSRD and sustainable corporate strategies.
- Germany elected a new federal government in February 2025 after the coalition collapsed, reshaping the political landscape for sustainability regulation.
- The CSRD has not yet been transposed into German national law; entry into force is expected during 2026 following a public hearing in April 2026.
- The Omnibus package is now in force (since 18 March 2026), raising the CSRD threshold to companies with more than 1,000 employees AND more than €450m net turnover, both criteria cumulatively.
- Companies should take "no-regret moves" now regardless of the political outcome: clarify responsibilities, run a materiality assessment, and monitor regulatory changes.
- Early action on sustainability reporting can reduce long-term risks and unlock competitive advantages.
Germany has decided: 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. The directive has not yet been transposed into national law in Germany, and with the Omnibus package now in force, it remains important to understand how implementation will unfold.
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 also depends on the political situation.
The Omnibus package has significantly narrowed the scope of the CSRD. Companies are now obligated to report only if they meet both of the following criteria:
- More than 1,000 employees, and
- More than €450m net turnover
Germany's national CSRD transposition law is not yet adopted. Entry into force is expected during 2026, with a public hearing having taken place on 10 April 2026. Member states must transpose the CSRD into national law by 19 March 2027.
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 had to form a coalition in order to govern. The CDU/CSU has spoken out against the CSRD and wants to reduce burdens on businesses 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 needed to regroup, which weakened their position in 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, campaigning for social aspects of sustainability reporting. They call 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.
- 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 aimed to form a government by Easter. The CDU/CSU consistently ruled out a coalition with the AfD, and the Left Party was also unlikely to be part of the government. Depending on the coalition formed, the following scenarios arise for companies:
| Coalition scenario | Likely CSRD approach |
|---|---|
| CDU/CSU and SPD (grand coalition) | Most likely coalition, with a moderate implementation of the CSRD. The CDU favors business-friendly adjustments; the SPD pushes for consistent compliance with EU requirements. |
| CDU/CSU, SPD and Greens (Kenya coalition) | A stronger focus on climate protection and sustainability regulations, which could mean stricter implementation of the CSRD. |
Recommendations for companies
Even if the situation remains uncertain, companies should act proactively to be as well prepared as possible for CSRD implementation. Preparing for the CSRD also offers companies real 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 actively commit to sustainability have better chances of receiving funding. 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 "no-regret moves" now in order to position themselves well 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.
- Run a Double Materiality Assessment (DMA): This analysis forms the basis of the CSRD and provides valuable strategic insights that can also be used beyond reporting obligations. Use an 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 to prepare for future sustainability reporting.
- Revise supply chain strategy: Consumers are paying more and more attention to sustainability in the supply chain. Companies should optimize their supply chain compliance at an early stage regardless of the political outcome.
- Adapt climate strategy: Early investment in CO2 reduction and energy efficiency measures can bring long-term benefits as regulations tighten.
- Monitor regulatory developments: Sustainability reporting and ESG requirements remain a dynamic field. Companies should follow current debates and legislative changes. The "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.
The double materiality assessment is the foundation of any CSRD report. Our Excel template guides you through the full process in a structured, audit-ready way.
Conclusion
The 2025 federal election reshaped Germany's political landscape and will have a significant impact on the implementation of the CSRD. The Omnibus package is now in force and has significantly raised the threshold for mandatory reporting. Germany's national transposition law is expected to enter into force during 2026. Companies should prepare proactively and follow political developments closely to avoid being surprised by regulatory changes. Early action can minimize risks and create long-term competitive advantages.
Frequently asked questions about the CSRD and the 2025 Bundestag election
Does the Bundestag election affect when the CSRD applies in Germany?
Yes. The national transposition law is not yet adopted, and entry into force depends partly on the legislative agenda of the new government. The Omnibus package has been in force at the EU level since 18 March 2026, but member states must transpose it into national law by 19 March 2027. For reporting year 2025, there is no obligation to apply the new ESRS unless the law enters into force retroactively.
Who is still required to report under the CSRD after the Omnibus changes?
Since 18 March 2026, mandatory reporting applies only to companies with more than 1,000 employees AND more than €450m net turnover. Both criteria must be met cumulatively. This significantly reduces the number of companies in scope compared to the original CSRD thresholds.
What are no-regret moves for companies right now?
No-regret moves are actions that are useful regardless of how the political situation develops. These include clarifying internal responsibilities for sustainability, running a double materiality assessment, familiarizing yourself with the ESRS VSME standard, and setting up systems for data collection. These steps pay off whether you end up under mandatory reporting or not.
Where can I find reliable updates on the CSRD implementation in Germany?
The "CSRD Compass" newsletter provides regular updates on regulatory changes. You can also monitor official publications from EFRAG and the EU Commission, and follow the progress of the German CSRD transposition law through the parliamentary process.
