Beyond Omnibus & Co.: The Substantive Challenges of Non‑Financial Reporting in Practice

One major obstacle is the availability of reliable data. This becomes evident, for example, in the application of the EU Taxonomy. For certain activities, a vulnerability or climate risk assessment is required in order for an activity to be classified as taxonomy‑eligible at all. These assessments are methodologically demanding, and go far beyond traditional reporting processes, especially as the practical approach to conducting such assessments has so far only been specified to a limited extent.

In addition to data availability, the structure of reporting itself represents a further challenge, particularly for corporate groups with multiple and diverse business models. The existing regulatory frameworks deliberately allow flexibility in the design of the non‑financial statement. However, concrete guidance is often lacking on how sustainability topics should be structured and presented across business areas. Without a clear conceptual reporting model, there is a risk of an unclear report structure and inconsistent disclosures.

The extensive data collection required further complicates implementation, and presents a particular challenge to corporate groups. Non‑financial reporting largely depends on effective communication and process structures, as well as on a clear allocation of responsibilities.  Different organisational structures, divergent understandings of data, and heterogeneous internal processes can complicate approaches to reporting. Also, the relevance of non‑financial reporting is often underestimated, which can further hinder cooperation across the group.

At the same time, developments are occurring that facilitate practical implementation. An increasingly permitted top‑down approach to the materiality assessment is perceived in practice as a significant relief. Sharing core business activities and strategically relevant topics, and using these as a basis to identify relevant impacts, risks, and opportunities increases efficiency and simplifies the identification process. The targeted use of artificial intelligence, for example, in the collection of potential impacts, risks, and opportunities can complement the analysis, provided the substantive assessment remains the responsibility of the company itself.

Overall, it is evident that the main challenges of non‑financial reporting are not determined solely by regulatory detail, but frequently lie in the practical design of processes and workflows, as well as in the limited availability of suitable data.

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Boris Michels (CPA, CVA, Tax Advisor) is Senior Partner in the Audit Department of nbs partners in Hamburg and Global Chairperson of the GGI ARC Practice Group. With more than 20 years of experience, Boris is responsible for international assignments and quality control. 

Friederike Becker is a German public auditor and tax consultant. Her core competencies are audits of annual and consolidated financial statements according to HGB and IFRS. She also focuses on company valuations and due diligence processes.

Luana Schroeter advises clients of nbs partners on the implementation of sustainability in their reporting processes and supports in the preparation of compliant sustainability statements.