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The path to a sustainability report from G.A. Röders
Sustainability reporting is attracting increasing attention. This development is provoking mixed reactions from many companies. With the Corporate Sustainability Reporting Directive (CSRD), the EU has significantly extended the reporting obligation. It is estimated that the number of companies subject to reporting requirements across the EU will increase from 11,600 to 49,000. From 1 January 2024, all public interest entities with more than 500 employees are required to report and from 1 January 2025, all other large companies under accounting law will be required to report. From 1 January 2026, all capital market-oriented SMEs will also be affected by the reporting obligation.
Clara Schüttler, Gerd Röders, Kathrin von Hülse (from left to right).Röders: The integration of sustainability reporting into business operations inevitably means additional, non-value-adding bureaucratic work. Despite this challenge, we see this process as a socially desirable task that we are happy to fulfil. Nevertheless, the requirements of sustainability reporting must not prevent us from generating added value through value creation. I am looking forward to, but also concerned about, the current developments in mandatory reporting. This is because SMEs have a significantly limited capacity to fulfil regulatory requirements.
Schüttler: The expansion of reporting obligations as part of the CSRD and the introduction of the European Sustainability Reporting Standards (ESRS) significantly increase the demands on companies. Even larger companies that have already gained experience in sustainability reporting report the need to adapt existing processes and build up additional capacities. Reporting against the ESRS should not be underestimated and there is likely to be a significant need for support to ensure effective implementation of these requirements.
G.A. Röders is not expected to be legally affected by CSRD reporting until 2026. What influenced your interest and the initiative to prepare such a report at an early stage? What advantages did this decision bring?
Röders: The topic of sustainability has occupied and interested me personally, as well as many employees in the company, for some time. We are asking ourselves how we can position ourselves within the social trend of sustainability. We see ourselves as a sustainable company that wants to actively participate in the social transformation.
Our roots in Soltau, which go back over 200 years, have enabled us to grow and develop together with the town. By producing our sustainability report, we see an opportunity to proactively respond to the questions and demands that society places on industry, and therefore also on us here locally. In doing so, we want to produce something that is not just tied to external pressures or legal obligations, but underpins our commitment to sustainable change.
At the same time, we know that the reporting obligation will come our way and believe that it is always beneficial to deal with future requirements in good time. In this way, we can ensure that we are well prepared by 2026 and can successfully manage the additional workload. We see a greater purpose in reporting and view the learning and change process as both an effort and an opportunity, which we want to tackle slowly but steadily. The early bird catches the worm - especially as a medium-sized company for which many of these requirements are uncharted territory.
The current report is written in accordance with DNK standards. What was your experience and assessment of this standard?
Von Hülse: At this point, we would like to give MARS the stage. Working with experts in this field has helped us enormously to address the requirements of the DNK standard and to write a report that fulfils the criteria.
We realised that some of the DNK criteria address aspects that many of us had not previously had any contact with. While many aspects of sustainability are familiar from our private lives, translating and implementing these principles into the corporate context was a challenge. In this context, the advice provided by MARS was particularly helpful. Their expertise helped us to understand and implement the application of the Sustainability Code criteria in our specific corporate context.
Röders: At the same time, we see the collaboration with MARS and the German Council for Sustainable Development as an opportunity to give something back. Not only do we want to benefit from their expertise, but we are also pleased to be able to share our practical insights and application experience and thus make a small contribution to the further development and application of sustainable principles in practice.
Schüttler: The 20 criteria of the Sustainability Code are already relatively comprehensive in terms of topics and also cover a variety of aspects, such as the sustainability strategy and the operational implementation of sustainability efforts within the company. This provides a comprehensive overview and, at the same time, a solid basis for dealing intensively with the company's own sustainability efforts and concretising them. This process also makes it possible to identify weaknesses or gaps in previous approaches by collecting key figures. In our collaboration with Röders, risk analysis in particular has received increased attention. We are currently working on deepening this further with regard to the CSRD.
Schüttler: The ESRS requirements will be even more extensive and demanding. In order to successfully master this expanded scope, it is crucial to familiarise yourself with these standards at an early stage. Established reporting structures, such as those that have now been created for the report in accordance with the DNK, are a very valuable preparation that will significantly reduce the effort involved in expanding to the ESRS.
Writing a sustainability report is often seen as an onerous requirement and a drain on time and resources. How much extra work did you have to do for this report? What resources were required?
Röders: As an automotive supplier, we had a considerable advantage because we are already fully certified. Our certifications include the quality management standard according to IATF 16949, the environmental standard according to ISO 14001, the occupational safety standard according to ISO 45001 (in development) and the energy management standard according to ISO 50001. Thanks to these established management systems, we have adopted a PDCA cycle (Plan-Do-Check-Act) mindset.
The process of planning, implementation, review using key figures and corresponding actions is familiar to us and integrated into our operating processes. This approach has considerably simplified our work on reporting, as we were able to utilise existing structures and processes and therefore required fewer resources to prepare the report.
Schüttler: If we look at the time frame, it has taken us around 6 months to finalise the first draft of the report. This is now being revised in line with the feedback from the DNK, for which we are planning an additional month. During this time, however, none of those involved have worked full-time on the report.
The process is characterised by data collection and collaboration between different departments and locations, which naturally takes time. The entire effort now relates to the development of the initial report. In the following years, it is possible to build on already established processes and collected data. It is common practice to only review and update aspects such as the materiality analysis on an annual basis or to expand them if necessary. In any case, this requires fewer resources than the initial development.
On the Sustainability Code platform, for example, there is a function for transferring a text from the previous year's report to the current one so that it can then be revised. Experience and knowledge grow with each year, which is why it can be assumed that the effort required will be reduced.
G.A. Röders is a company that has been very familiar with sustainability issues for some time now - an ideal prerequisite for a sustainability report. What challenges did you still face? And what did you learn from them that could help other companies in advance?
Röders: The biggest challenge for us was defining the stakeholders and key aspects. As a manufacturing entrepreneur, I am of course closely linked to my product. However, the requirements of the report go far beyond the product, which can be particularly challenging for SMEs.
We encountered difficulties because we lacked a clear systematisation. We had not previously asked ourselves such specific questions about our position and interaction in society. In our case, the previous identification of stakeholders and key aspects came naturally through our close connection with the Luneburg Heath. For future reporting cycles and for other companies, it is certainly helpful to deal extensively with such questions at an early stage in order to create a solid basis for reporting.
Schüttler: One of the challenges was that risk analyses and assessments did not systematically cover the entire supply chain until now. My impression is that, in view of the geopolitical tensions of recent years, supply chain issues have become increasingly important for SMEs, for example in terms of resilience and security of supply, but sustainability aspects have tended to take a back seat. Although many companies are aware of the overarching risks in their supply chains, reporting requires systematic analysis and, for example, underpinning with risk management systems in order to fulfil the requirements of the DNK and later the ESRS.
A key component of the sustainability report is the sustainability strategy. What did you emphasise in your strategy?
Von Hülse: The fact that G.A. Röders has been operating successfully on the market for around 200 years is already proof of sustainability to a certain extent. Many of the facets of sustainability have been practised by us for a long time, even if they have not been explicitly written down. A key component of our sustainability strategy on site is social commitment, particularly in the form of employing skilled labour and training new junior staff.
In addition, aspects of raw material procurement and, in particular, the optimisation of our processes are important components of our sustainability efforts.
To what extent has the reporting process influenced your existing sustainability strategy?
Von Hülse: The process has sharpened many of the existing endeavours. It has also become clear that many of the measures need to be systematically documented in order to make them more visible. This process has motivated us to think ahead and possibly expand existing approaches. The systematic documentation and concretisation of sustainability efforts not only enabled transparent external communication, but also strengthened internal awareness and commitment to sustainable corporatmanagement.
Röders: I completely agree with that. Putting information in writing often provides more clarity and structure. By defining a company policy, you take an important step towards self-reflection and accountability.
With MARS, G.A. Röders has now reached an important milestone towards transparency and accountability. How do you see the future? And what needs to be ensured within the political arena in the future?
Röders: We are confident about the future because we manufacture products that are essential for a sustainable world. We see ourselves as an integral part of this sustainable world and are therefore happy to produce a sustainability report that documents our position.
With a view to political developments and future requirements, I would like to see a certain amount of trust placed in small and medium-sized enterprises, without overwhelming them with excessive bureaucratic hurdles. For small(er) companies, there is only a limited amount of regulations and requirements that can be implemented, although many of our sustainability efforts are also realised outside of a formal report.
Furthermore, the requirements should not only be realistic and realisable in terms of quantity, but also in terms of content. As a medium-sized company, it is difficult to ensure due diligence right down to the mining region. We must therefore be able to rely on German and European guidelines to ensure that our suppliers act sustainably in the broader sense.
In this context, I am in favour of sensible and well thought-out moderation in the regulatory landscape. This also fits in well with the principle of sustainable business...
Schüttler: I am very much looking forward to finalising the report soon. I am convinced that it is a very good report that will be very exciting for many stakeholders and for the sustainability journey ahead. At MARS, we pursue the important goal of preparing SMEs for CSRD and establishing reporting processes in companies. We support companies from the materiality analysis to data collection and the development of report content. I hope and believe that we have now mastered this well together with G.A. Röders for the DNK.
About the sustainability report
By preparing its first sustainability report, G.A. Röders has set a major milestone and a strong example for other companies. The process was undoubtedly associated with additional work, coordination and harmonisation of multiple players inside and outside the company. But Gerd Röders and Ann Kathrin von Hülse emphasise the added value that the process has brought to the company.
In concretising and expanding the existing sustainability efforts, they not only followed guidelines and requirements, but also developed their own motivation to take a closer look at and define the company policy. As a sustainable company firmly rooted in its community, the report makes a significant contribution to its transparency, credibility and reliability.
In order to be well prepared for the challenges ahead, G.A. Röders recommends analysing operational materiality and risk management at an early stage. Good preparation can be particularly helpful for medium-sized companies that have little experience in systematically analysing these structures.
The DNK criteria were demanding in their scope and requirements, but with the appropriate support from MARS, a manageable framework for a company like G.A. Röders. The established processes and experience gained now provide a good basis for the coming years and the step towards a CSRD-compliant report.
We would like to thank G.A. Röders for their commitment and the initiative to prepare such a report at an early stage. We would also like to thank MARS and the DNK for the opportunity to co-operate and for their contribution to such an important step in G.A. Röders' sustainability journey. And finally, we would like to thank Gerd Röders, Ann Kathrin von Hülse and Clara Schüttler once again for making this interview possible and for their openness and honesty!
