The EU’s Corporate Sustainability Reporting Directive (CSRD) requires companies to make detailed disclosures about sustainability performance and consider the implications of sustainability across a wide range of topics, including climate change, business conduct, resource use, pollution and biodiversity. Is the health industry (HI) ready to report in line with the Directive?
Despite the challenges of tight timelines and reporting complexity, many of the 547 participants in PwC’s inaugural Global CSRD Survey 2024 believe that reporting under the Directive will bring tangible business benefits. A significant majority of companies, including those headquartered outside the EU, are increasingly incorporating sustainability into their decision-making processes, recognising the positive impact of the CSRD, such as improved environmental performance, better engagement with stakeholders and risk mitigation.
The survey suggests that companies are starting to appreciate that the Directive is not only a new major reporting obligation but also an opportunity for leaders to understand in greater depth how sustainability will challenge today’s business models and create opportunities for growth and reinvention. About one-third of respondents even anticipate revenue growth and cost savings directly tied to CSRD compliance, with optimism higher among those further along in its implementation.
However, companies have identified several obstacles to successful CSRD implementation, including issues with data availability, limited staff capacity and the need for substantial investments in technology.
What about the health industry?
The health industry faces unique challenges associated with their complex value chains and heavily regulated environment. Overcoming these challenges and effectively integrating sustainability-related data into decision-making processes will require significant cross-functional efforts and the strategic use of transparency-enhancing technologies.
Key insights from the survey for the health industry
- 26% of HI companies face over 100 individual reporting obligations (IROs) before applying a materiality threshold, higher than the global average of 16%. 90% of HI companies identify value chain and data quality as their biggest obstacles.
HI companies demonstrate higher involvement of the Board (81% vs 70% overall) and ESG committee (92% vs 84% overall) in CSRD reporting implementation. Finance departments are also more engaged, with an involvement rate of 80% vs 77% overall.
Confidence in reporting is lowest for biodiversity and ecosystems (E4) and affected communities. However, HI companies exhibit higher confidence in reporting for consumers & end users.
HI companies prioritise opportunities such as better social performance, improved stakeholder engagement and more effective corporate governance.
85% of HI respondents plan to comply at a consolidated group level, exceeding the overall average of 75%, likely due to organisations based outside the EU.
Summary
Many players in the health industry expect implementation of the CSRD to yield benefits, particularly in terms of better social performance, improved engagement with stakeholders and more effective corporate governance. However, there are significant obstacles, including issues with value chain complexity, data quality and the challenges of operating in such a highly regulated and environmentally and socially sensitive industry.
These challenges are evident in PwC’s recent analysis of over 100 global priority accounts, which found that only about a quarter of clients are prepared to meet the Directive’s reporting requirements.
PwC can support you on your CSRD journey by helping you to understand the reporting criteria, translating these requirements into actionable strategies, assessing your readiness and transforming processes to embed sustainability practices seamlessly into operations. Reach out to us if you need support in getting ready for the CSRD.
Explore the full insights from PwC’s inaugural Global CSRD Survey 2024, covering trends and findings across all industries
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