How do you approach managing legal aspects during periods of instability or crises, and how does your legal strategy align with the broader business strategy to ensure the organisation’s resilience?

Apart from the uncertainties und instabilities that come with the ongoing armed conflicts in the world, we had an unstable political situation in Germany during the recent year. Against this background, it became an important part of the work of a legal department to align legal strategies with management and the overall business strategies of the organization.

For example, the German government introduced a German “Lieferkettensorgfaltspflichtengesetz” (Supply Chain due diligence act) already in 2021, applicable since 2023, although the corresponding EU directive was not already entered into force. This led to unclarities in the economy, and the German “Lieferkettensorgfaltspflichtengesetz” was the subject of various political and governmental discussions in 2024. Those insecurities of legal framework conditions do not make the work of legal departments in companies easy as the management is constantly questioning the need to implement changes if their legal fundament is not fully clear. However, we as the legal department and as a company choose to comply with it at all times, even if they may be subject to tightening or softening soon. We want to avoid any situation where we would have to introduce changes to our business organization under time pressure to fulfil compliance at the last minute. We are guided by the principle that the legal requirements might be subject to minor changes but will be implemented in their fundamentals. Therefore, we keep a close eye on the national and European political developments and the developments of national draft legislation and keep the management informed on a regular basis. Together we will decide how the company shall best prepare for upcoming – legal and economic – changes.

How do you measure the impact of ESG initiatives on the company’s overall performance and reputation?

The impact of ESG initiatives will become more and more relevant within the next years. As we will have to publish a Sustainability Report with our year-end statements in the future, we are already now setting up internal steps to gather the relevant basis information.

Although the German government did not transpose the Corporate Sustainability Reporting Directive (“CSRD”) to national law on time, we assume that this will be caught up soon.

The first step for any company will be to define the relevant topics of the European Sustainability Reporting Standards (ESRS) as their materiality analysis and starting point. We have already started this process.

Compliance with ESG requirements will be very important for our company in the future. We assume that financial and private shareholders will keep a close eye on the company’s performance in this sector. This might lead to the situation that access to capital might be denied if a company is not compliant with sustainability reporting standards or has a weak ESG performance. Further, qualified employees are highly competitive on the labor market. They might prefer working for a company valuing the ESG initiatives. Therefore, appreciating ESG initiatives and implementing sustainability measures might lead to an increase of a company’s reputation.

What do you see as the major legal challenges for businesses in Germany over the next five years, and how are you preparing to address them?

In Germany we face a situation where big and well know companies currently announce to close down factories and lay off workers, which leads to an unstable economic situation. The legal challenges for businesses in the future lie in balance of complying to all legal requirements and not losing the focus on the base business and operations.