Coalition agreement 2025: impact on ESG reporting

On April 9, 2025, CDU/CSU and SPD agreed on a coalition agreement for the next four-year legislative period. This agreement also outlines political plans that will impact the landscape of sustainability reporting.

From the perspective of reducing bureaucracy, it is stated that regulations such as the deforestation regulation (EUDR) the reporting requirements under the CSRD and EU Taxonomy , as well as the carbon border adjustment mechanism CBAM are to be significantly reduced and simplified.

The national Supply Chain Due Diligence Act (LkSG) will be repealed and eventually replaced by the European Corporate Sustainability Due Diligence Directive (CSDDD). However, following the EU Commission’s "stop the clock" omnibus proposal, the CSDDD will only come into effect from mid-2028. This results in a multi-year break in Germany regarding supply chain reporting obligations for large companies.

Overall, the coalition parties SPD, CDU, and CSU support the EU Commission's omnibus initiative. However, it remains unclear whether this support extends to all specific points of the proposals or only to the overarching goal of "reducing and postponing" reporting obligations, particularly for small and medium-sized enterprises.

The aim of these measures is to create greater legal and planning certainty for companies.

Further key points in the coalition agreement regarding climate and ESG topics:

• Exporters of CBAM-related products are to be supported where necessary, to avoid competitive disadvantages in international markets – potentially even through "free allocation of certificates."
• The coalition partners aim to ensure that the deforestation regulation (EUDR) will not apply in Germany. While application of the law had already been postponed by one year to December 2025, the new plan is to introduce a "zero-risk" classification for countries like Germany, where no deforestation risk exists.
• Climate and economic issues are to be treated separately going forward, reflected by the renewed separation of the respective ministries.
• Climate policy will focus on the emissions trading system ETS 2 for buildings and transport.
• Instead of a climate bonus, targeted funding programs for housing and mobility will be introduced.
• The coal phase-out by 2038 remains on the agenda.

Despite these shifts, the agreement reaffirms the coalition’s commitment to achieving climate neutrality by 2045, implementing the Paris Agreement, and reducing CO₂ emissions.

You can find the full coalition agreement here [GERMAN].

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