Environmental, social and governance (ESG) criteria have been used for years to assess a company’s wider performance, challenging executives to measure the ethical value their businesses create. HealthLeaders and Bank of America recently held a roundtable where nonprofit healthcare leaders discussed adopting an ESG framework as consumer expectations, the industry and ESG itself evolves.
Fully integrating ESG
For healthcare organizations, a comprehensive ESG framework calls for strong environmental initiatives, as well as business leaders who embrace diversity and inclusion as essential duties. One panelist notes the importance of taking a holistic view, citing environmentally friendly products, conserving natural resources and promoting policies that protect human dignity, as essential to their mission.
Realistic priorities and attainable goals
Health leaders need to help their organizations understand that an ESG strategy is more than something to cite in an annual report. It needs to be a practical, long-term mission with specific goals. One panelist notes how setting meaningful priorities, whether that’s improving local housing or easing food insecurities, influences organizations to behave differently. Another panelist reinforces the idea that the prosperity of healthcare organizations is inextricably linked to the health of the communities they serve.
Using ESG scores to find strong partners
Research has found that companies with a strong ESG agenda tend to avoid financial trauma and difficulties. One panelist notes that this makes ESG an important factor in choosing organizations to collaborate with. Another comments that, just like the due diligence commonly undertaken in other areas of an organization, making sure a potential partner’s values and mission align with yours is key.
Where next for ESG?
Future health leaders are likely to be millennials, 87% of whom think ESG is important. When this new generation is setting the agenda, ESG, sustainability and corporate social responsibility will likely become ubiquitous business terms. One panelist thinks we need to continue to focus on developing leaders who share an organization’s vision and values, while another believes that disruption in the healthcare industry will change both consumer expectations and the mindset of healthcare providers, emphasizing ESG activities.
Sam Ross, MD
Chief Community Health Officer
Bon Secours Mercy Health
President, Bon Secours Baltimore Health System
President, Advocate South Suburban Hospital
Advocate Trinity Hospital
Hazel Crest, IL and Chicago, IL
Kendra N. Smith
Director, Social Determinants of Health
Donald R. Lurye, MD
Executive Vice President
Bank of America
- Running a successful healthcare business requires a sense of communal responsibility
- Healthcare leaders can use ESG principles to help influence an entire organization, from recycling policies to diversity and inclusion
- Transparency around ESG activities has increased, and it’s on course to become an even bigger part of the corporate agenda