Exploring ESG and healthcare

"We already do ESG," is a common refrain among healthcare leaders. The work of caring for the sick and preventing illness among the well may be noble work in itself, but when it comes to setting targets and measuring progress on matters concerning the environment, social equity and governance, healthcare is falling behind other sectors. Industries spanning technology, media, telecommunications, retail, and oil and gas, have been more proactive in setting out net zero commitments, board diversity and other ESG targets.

In many jurisdictions, healthcare doesn’t face the same level of reputational risk as sectors whose activities are commercial in nature, but that does not grant it a free pass on ESG. Healthcare organizations ought to be concerned about climate change and social inequality. A cooler planet and a fairer society also contribute to better human health. Strong governance is arguably more important in healthcare than other sectors because of the thorny ethical issues that can come up when human lives hang in the balance.

As things stand, healthcare leaders have other things on their mind. A global survey of 200 healthcare CEOs¹ found ESG to be the least important organizational key performance indicator among survey respondents. More pressing were the areas of customer experience, clinical quality, workforce satisfaction and financial performance.

ESG isn’t just another box to tick. Done well, it can become the lens through which other priorities are viewed. A cooler planet will contribute to better human health. Customer experience can be enhanced by healthcare workforces reflecting the populations they serve. Clinical quality is upheld by strong governance. Workforce satisfaction can arise from greater commitment to diversity and inclusion. Organizations looking for outside investment may have to contend with institutional investors and other market players increased interest in incorporating ESG factors into investment decisions.

In this sixth issue of Healthcare Foresight, we make the case for putting ESG at the heart of healthcare and share stories of organizations that are leading the way. These stories include:

• How The Bahamas, a nation at the front line of climate change, is working to create a more sustainable and resilient health system
• Why historic bias in the collection of genomic data and emerging technology could dramatically accelerate existing health inequities and how a regulator and start-up in the United States are addressing this issue
• How governance can be the starting point for infusing environment, social and governance considerations into every level of healthcare organizations, highlighting an example from The Netherlands

I hope that you will find these articles both challenging and encouraging. Healthcare, given its inherent focus on wellbeing, intersects deeply with the tenets of ESG. I feel that the sector has the clout to move the needle on greenhouse gas emissions, the ingenuity to use cutting-edge science to push for social justice and the leadership to transform how organizations are run. Many healthcare organizations may be already making decisions that fulfill ESG criteria. They may indeed already be "doing ESG." But unless they take time to reflect on their ESG performance, formalize its measurement and track its progress, they won’t get credit for it.

At KPMG, we aim to help the sector navigate the complex intersections of sustainability, equity, and governance with a suite of services that include ESG strategy, transformation, and implementation tailored to the unique needs of healthcare organizations.

Dr. Ed Fitzgerald
Healthcare Foresight guest editor

                                         How organizations are helping to make healthcare more sustainable, resilient and equitable

                                                                                                          Issue 6 – October 2023