Date:
This article was written by
German Public Auditor, Certified Tax Advisor, Partner, Advisory
The planned implementation of the Corporate Sustainability Reporting Directive (CSRD) into national law would have obliged the vast majority of hospitals in Germany to add a sustainability report to their management report. Though, with the EU's so-called ‘omnibus’ initiative, the impact, timing and content of the reporting obligation are once again unclear for many hospitals. Despite gaining time, the impending reporting obligation is perceived as an additional burden, especially at a time when hospitals would like to see a reduction in bureaucratic requirements. The associated personnel and financial resources represent a challenge for many facilities. Together with the German Hospital Institute (DKI), BDO has analysed the challenges, opportunities and current status of the implementation of the Corporate Sustainability Reporting Directive (CSRD) in the industry in its tenth joint study.1
Even without a detailed look at the results, the relevance of the topic in the German hospital landscape becomes clear. Well over 300 hospitals from the surveyed group of general hospitals with more than 100 beds took part - a record result. However, the concrete results show that the implementation of the topic still needs to be optimised. Only 11 per cent of hospitals have already produced their own sustainability report, while 70 per cent have no experience with sustainability reporting. This shows that many hospitals will face a considerable challenge when the reporting obligation hits them.
The study reveals that the majority of hospitals see themselves as ‘starters’ or ‘beginners’ when it comes to sustainability management and reporting. Only 3 per cent of hospitals consider themselves to be pioneers in this area. Larger facilities are more likely to be able to implement sustainability strategies, while smaller hospitals are often more reticent.
The reasons for this are clear: the bureaucracy and time required to prepare sustainability reports is high. The median effort per hospital is estimated at around one full-time equivalent and the time required to prepare a report at around ten months. Hospitals therefore primarily see sustainability reporting as an additional burden. More than half of the hospitals have already sought external advice on the preparation of the sustainability report or are planning to do so in the future. External expertise is a tried and tested way for hospitals to reduce the workload as much as possible and bring expertise on board.
Last year, the implementation of the CSRD into German law failed when the coalition in Germany broke down. With the ‘Omnibus’, a new proposal on the addressees, timing and content of the reporting obligations was then made at EU level at the beginning of 2025. Nothing has been finalised yet. Hospitals and many other affected companies must follow current developments regarding the implementation of the CSRD reporting obligation in German law.
Despite the challenges and uncertainties, many hospitals recognise the potential benefits of sustainability reporting. The reports will help to improve internal processes, strengthen the image towards patients and employees and ultimately achieve economic advantages over the competition.
These approaches show that the industry is aware of the opportunities and potential associated with this topic. Managers who want to utilise this for their hospital or company must not only prepare themselves for a possible reporting obligation, but also weigh up whether voluntary sustainability reporting makes sense.
In many areas of the German economy, voluntary non-financial reporting is already an established instrument for improving stakeholder relations. In the healthcare sector, which overlaps with the public sector in many areas, where reporting is often based on the UN's Social Development Goals (SDGs) and the taxonomy rules do not apply, voluntary reporting has been in place to date - but nowhere near to a comparable extent. The argument often cited against voluntary reporting is the cost and effort involved. This can also be seen from the results of the study. It is clear that a management system must be implemented and resources allocated even for voluntary reporting without ‘external compulsion’. This is the only way to ensure efficient, target-orientated and formally correct reporting. It must therefore be carefully considered whether this organisational, personnel and ultimately financial effort is really worthwhile under certain circumstances. There are three examples that speak in favour of a positive effect:
Hospitals, which are part of the public sector, are a special case here. The common goal of public administration and public companies of efficient and impact-orientated management leaves no other option: a management system in the above sense must be established. Particularly in view of the issues of municipal services of general interest, which are almost invariably linked to the concept of sustainability, it is almost inconceivable for publicly owned hospitals not to take a professional approach to sustainability reporting in the long term.
Hospitals should increasingly see reporting as an opportunity - despite understanding the burdens and the many challenges involved. For example, in addition to providing an unbiased view of ecological and social issues, they can also improve processes and strengthen their image. Regardless of the organisation, size or structure of hospitals, those responsible should therefore take the topic seriously and, on the one hand, continue to closely monitor the progress of CSRD implementation and the ‘Omnibus’ initiative and, on the other hand, proactively examine whether voluntary sustainability reporting is an option for their own hospital. It is important that hospitals are provided with the appropriate financial resources for the necessary investments in professional sustainability reporting.
1 BDO/DKI (2025): Sustainability reporting in hospitals. URL: www.bdo.de/kh-studie-2024. [Status: 31.01.2025]