New German corporate sustainability code gaining momentum

The new German corporate sustainability code looks to be gaining momentum with at least one major company, energy giant RWE, saying it is thinking about signing up.

The code was developed by the German Sustainability Council (DNR) and unveiled in October 2011. It contains guidelines for reporting on environmental, social and governance (ESG) issues. One notable example is that for reporting on shareholder engagement.

So far, six firms have signed up. They are city cleaner Berliner Stadtreinigung, retailer Otto Group, supermarket chain REWE, paper firm Steinbeis, auto certifier TÜV Rheinland and mountain sports supplier VAUDE. Now RWE has said it may join, an indication that it may be gaining traction among blue-chip companies.

“Our firm has tracked the development of the code and is now considering signing up to it,” a spokesman told Responsible Investor.The energy giant is a member of the blue-chip DAX stock index. Analysts said that if RWE joins, a slew of other DAX firms could join by as early as this summer.

The DNR leaves it up to the firm to decide how the reporting on ESG issues is done.

“Our firm has tracked the development of the code”

For listed firms, one recommendation is for it to be integrated into their annual business reports, said Yvonne Zwick, a consultant at the DNR.

Formerly one of Germany’s biggest nuclear firms, RWE is investing €3.9bn in renewable energy by 2014, a third of which in Germany. By then, it hopes to set up offshore wind parks that together will generate 1000MW of power.