GERMANY Law and Practice Contributed by: Eva Nase and Kay-Uwe Neumann, POELLATH
set out in the DCGK, in particular the recom - mendations.
to the MAR (eg, changes to ad hoc disclosure of insider information by listed companies) and the
EU Prospectus Regulation. 2.2 ESG Considerations HGB
2. Corporate Governance Context 2.1 Hot Topics in Corporate Governance Sustainability, ESG and Supply Chain The topic of sustainability as well as social and environmental responsibility has become increasingly significant in both German and global corporate governance, resulting in more specific and extensive expectations and legis - lation on this matter, both at national and EU level. In particular, the EU Corporate Sustain - ability Reporting Directive (CSRD) as well as the German Supply Chain Act came into force in January 2023 (see 2.2 Environmental, Social and Governance (ESG) Considerations ). Cross-Border Conversion The Conversion Directive Implementation Act was adopted in early 2023. In summary, it pro - vides a harmonised legal framework for cross- border conversions, mergers and divisions at EU level. Financing for the Future Act With effect from 15 December 2023, the Financ - ing for the Future Act introduced numerous changes for stock corporations. It aims to make it easier for companies, especially start-ups, to access the capital markets. Shares with multiple voting rights were reintroduced in the Stock Cor - poration Act. Additional structuring options were also introduced to simplify capital increases with the exclusion of subscription rights. EU Listing Act As part of the EU Listing Act, changes to capital market law are expected to be implemented in the first half of 2024. These include amendments
Under the HGB, larger listed capital companies with more than 500 employees are under a duty to issue a non-financial declaration that expands their management report. This declaration has to briefly describe the business model of the com - pany. Moreover, it has to refer to other aspects of corporate social responsibility – at least to environment-related, employee-related and social matters as well as to the respect shown for human rights and the efforts made to fight against corruption and bribery. CSRD In January 2023, the new CSRD came into force at the EU level. The goal was to bring corporate sustainability reporting in line with the EU’s ambi - tion to become the first climate-neutral continent by 2050. The new CSRD expanded the reporting requirements to include further information on environmental, social and governance matters in addition to the already-known aspects concern - ing environmental, labour and social matters, respect of human rights and the fight against corruption and bribery. The new CSRD was to apply to all companies listed on a regulated EU market and non-capital- market-oriented companies that exceed two of the following three criteria: • EUR50 million annual turnover; • EUR25 million balance sheet total; and • an average of at least 250 employees. However, as the directive has not yet been implemented into German law, the new reporting
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