Unveiling the effects of the Corporate Sustainability Reporting Directive (CSRD) on company sustainability reporting practices: a case of German companies

Purpose The purpose of this paper is to explore how the Corporate Sustainability Reporting Directive (CSRD) impacts the sustainability reporting practices of German companies. By addressing concerns about environmental, social and governance (ESG) issues, the study aims to provide a deeper understanding of how regulatory changes influence reporting practices, corporate transparency and stakeholder engagement. This research investigates the implications of transitioning from voluntary to mandatory assurance and how compliance with the CSRD can drive long-term growth and operational effectiveness. The study contributes to the ongoing discourse on corporate responsibility and sustainability in the context of evolving regulatory frameworks. Design/methodology/approach This study uses a qualitative research design with a mono-method approach, guided by an interpretivist research philosophy and an abductive approach. Semistructured interviews were conducted with 20 industry experts to gather rich insights into the CSRD’s impact. The analysis focuses on themes such as regulatory compliance, resource allocation and stakeholder pressures. This approach enables a comprehensive exploration of how companies navigate complex regulatory environments, particularly in terms of adopting and implementing CSRD guidelines. The methodological rigor ensures the findings are grounded in real-world experiences and applicable to various corporate contexts. Findings The findings highlight a transformative shift in sustainability reporting practices driven by the CSRD. Publicly traded companies are adapting swiftly, while nonpublicly traded firms and small- and medium-sized enterprises (SMEs) face challenges due to limited resources and regulatory complexities. Despite these challenges, the CSRD is expected to align reporting frameworks, enhance comparability and deepen the understanding of corporate social responsibility. It acts as a catalyst for compliance and transformation, emphasizing mandatory assurance as a strategic investment. The findings also underscore the role of stakeholders and institutional pressures in shaping reporting practices within a dynamic regulatory environment. Practical implications This research offers actionable insights for companies, policymakers and practitioners. It highlights the need for tailored support mechanisms to assist SMEs in achieving compliance and underscores the strategic value of regulatory adherence for long-term growth. Companies are encouraged to view the CSRD not merely as a compliance requirement but as an opportunity to enhance transparency and stakeholder trust. Policymakers can leverage these insights to refine implementation guidelines, ensuring inclusivity and effectiveness across diverse corporate sectors. The study also informs investors about the evolving landscape of sustainability practices, supporting informed decision-making. Social implications The study addresses significant implications for global sustainable development by promoting alignment in sustainability reporting standards. The CSRD fosters accountability, transparency and comparability, contributing to responsible corporate behavior. By encouraging companies to integrate ESG considerations into their operations, the directive supports the United Nations sustainable development goals (SDGs). It also facilitates a deeper societal understanding of corporate social responsibility and its role in addressing pressing environmental and social challenges. The research highlights how regulatory frameworks can drive meaningful change and inspire sustainable practices across industries, benefiting society at large. Originality/value This paper provides a novel exploration of the CSRD’s impact on sustainability reporting practices in Germany. It offers unique insights into the challenges and opportunities arising from the directive, particularly for SMEs and nonpublicly traded entities. By emphasizing the transition from voluntary to mandatory assurance, the study sheds light on the strategic importance of regulatory compliance. The findings are valuable to regulators, investors and practitioners aiming to understand and navigate the evolving sustainability landscape. This research enriches the academic discourse and provides practical recommendations for fostering sustainable corporate practices in a complex regulatory environment.