ESG: Healthcare’s New Imperative - Corwin Harper
Environmental, Social, and Governance (ESG) is a framework used by corporations and companies to demonstrate their commitment to social responsibility to shareholders, donors, and customers. In addition to helping create a greener, healthier, and more equitable community, ESG can help companies generate more investors and customer loyalty. Due to the effects of the pandemic, there has been increased pressure by consumers, communities, and employees for companies to adopt values that invest in social responsibility. I recently read an article published by Modern Healthcare, ESG: Healthcare’s New Imperative, which highlights how and why healthcare systems need to prioritize ethical missions and values.
In the healthcare industry specifically, systems have been slow to act on the ESG framework. However, the demand for healthcare leaders and boards to understand and adopt these principles has become immediate. “The question for health systems is, are we going to be a follower or are we going to be a leader (on ESG)? We want to be a leader, so let’s get on top of it, and let’s begin to have these discussions.”
Implementing effective ESG goals starts with the board of directors and C-suite. In order to ensure the company’s ESG missions are being enforced, it requires commitment and support from leaders to monitor the progress of these goals. To encourage the entire organization, from the top to the bottom, to focus on achieving these ESG initiatives, they should be tied to compensation. For instance, many CEOs’ compensation is partly dependent upon reaching ESG and DEI metrics. Due to the rapid pace of our society, it is critical that companies are constantly adapting their program so that it matches the right priorities. Lastly, ESG goals must be realistic. Start with small goals to prevent overwhelming and disappointing feelings. Then, build off of these small wins and take on new challenges that will help create a sustainable, inclusive, and engaging community.
It is vital to be completely transparent about the ESG framework. “All stakeholders — be they patients, lawmakers, donors, regulators, or in the case of public companies, investors — are seeking this information from large industries when determining whether or not to engage.” If there is no public information about a company’s ESG efforts, it can result in poor ESG ratings and a competitive disadvantage.
“If you have the capacity to provide health services to patients, you have the capacity to assess and look at ESG impacts.” Society is shifting towards prioritizing people and our planet over profit. If companies want to remain successful in today’s competitive market, they need to implement and enforce ESG policies. We have seen some ESG-related work in healthcare organizations, but there is much more to improve on — specifically on the ‘E’ and ‘G’ pillars.
You can read the original article here.
