ESG trend in the health care industry
| Terrilyn Pun, Specialist in Urology, Hong Kong
change is a health crisis. The World Health Organization estimates that climate
change will lead to an additional 250,000 deaths a year between 2030 and 20501.
An expanding body of evidence is linking climate change phenomena to
exacerbation of heart and lung diseases, increasing impact from infectious
diseases, and malnutrition in vulnerable areas. Health care supply chain
disruption, power outages and damage to health care infrastructure are seen
with extreme weather events, and these disruptions are anticipated to escalate
global health community is now starting to recognize the threat. At the UN
Climate Change Conference in Glasgow (COP26) in 2021, 50 countries have
committed to develop climate-resilient and low-carbon health systems, of which
14 countries have pledged net zero goals for their national health systems2.
In addition, 54 institutions from 21 countries, representing more than 14000
hospitals and health centres, have joined the UNFCCC Race to Zero campaign,
striving to reach net zero emission before 2050.
survey was conducted on the New England Journal of Medicine Catalyst Insights
Council members in November 2021, involving clinicians, clinical leaders and
executives at health care organizations around the globe. Of the 792
respondents, over half have high or moderate recognition of climate change
health impacts, and 69% report that it is extremely or very important to them
that their organization implements policies and processes to reduce its impact
on climate change3.
good news is that a multitude of practical green solutions exist, and many had reaped
outstanding results by putting them into action. These solutions include energy
conservation and efficiency programs, climate-sensitive waste management and
device reprocessing, shifting to clean energy, leaner service models by
rethinking service delivery and integrating technology into care pathways.
is in this landscape, where environmental impact is being increasingly
prioritized, and where health care providers are looking to add value to the
community that they serve, that we need to embrace ESG reporting for the health
reporting for health care delivery systems
reporting is an excellent way to demonstrate an organization’s commitment to contribute
to the health of the community and the planet. It demonstrates accountability, by
disclosing its environmental and social impact, and how it is regulated. The
organization can identify areas of opportunity from the report, formulate
practical plans and track progress.
are some of the common parameters that are included in ESG reports for health
care delivery systems:
organizations would also report the cost analysis, and their health impact in
terms of treatment outcome.
equipment and supplies, biotechnology and pharmaceutical companies
by the Climate Change Act of the United Kingdom, their National Health System
(NHS) had made a commitment for their operations to reach net zero emission by
2045. According to their report ‘Delivering a Net Zero National Health System’4,
supply chain was their leading cause of greenhouse gas emission, and accounted
for 62% of their carbon footprint. In order to reduce their supply chain
emission, they are actively looking for low carbon alternatives, and requesting
carbon reduction plans and transparency reports from suppliers. By April 2027,
the NHS will no longer purchase from suppliers that have not aligned with their
trajectory towards net zero operation.
is anticipated that decarbonizing the supply chain will become a global trend.
While this presents substantial risks to suppliers that have yet to demonstrate
sustainable practice, these companies will also have valuable opportunities to
differentiate themselves by going green.
reporting is an important tool to relay the sustainable goals of the company to
its customers and investors, and to show how the goals are being realized. Here
are some parameters that are frequently included in the ESG reports of medical
While climate change gives
rise to considerable risks to the health care industry, these risks can be
mitigated with timely action from its various stakeholders, united in the goal
to better the health of mankind and the planet. ESG will be a powerful tool in
advancing this cause and staying ahead of vulnerability.