ESG in Healthcare

It has been an extraordinary year for the healthcare sector. With the seemingly overnight global spread of Covid-19, healthcare officials and providers have had to innovate rapidly to respond to the ever-changing public health situation. From adopting new technologies to allow for virtual consultations, to prioritizing mental health, to having health inequities exposed at the societal level in dramatic ways, it seems like the sector began a sprint in December 2019 that is showing little sign of slowing down.

While this has thrown up exceptional challenges, and many healthcare workers are feeling the effects of burnout and frustration, it has also shown what the industry is capable of, and has generated incredible opportunities that may otherwise have taken years to come to fruition. 

While we continue to respond to the Covid wildfire, the successful vaccine program in Canada is allowing leaders to pause for breath, however briefly, and consider what the future of the sector will look like. And there are big questions on the horizon. If Covid is to become a permanent spectre in our lives, how can providers respond, while continuing to treat patients with unrelated but equally pressing needs? What opportunities does reorganization of healthcare provision present, particularly with the formation of Ontario Health Teams in the province? What responsibilities do healthcare operators have in the creation of a more equitable society and a healthy planet, both of which have significant public health implications?

Each of these questions may seem unrelated, but an ESG sustainability model frames them differently. By looking at these big issues with an ESG lens, we can see that they tie into a larger, but ultimately simpler question: How can the sector create a present-state where the healthcare needs of the current generation are met, while supporting a future society where healthcare can continue to be delivered in a sustainable way?

Let’s break this down. 

Environmental Sustainability in Healthcare

Here’s a fact that may surprise you. If healthcare were a country, it would be the fifth-highest polluting nation on the planet. 

It’s easy to think that the healthcare industry does enough good in the world, addressing not only the needs of individual users of the system, but tackling health policy and major public health questions. Providers may feel they don’t have the bandwidth, or the moral imperative, to tackle the climate crisis as well.

However, the world is increasingly recognizing that the climate crisis is a public health emergency, requiring a similar level of coordinated global response as we have seen for the recent pandemic. This summer, British Columbia’s provincial coroner estimated that over 1000 people died due to the unprecedented heatwave. Wildfires such as those seen in the Okanagan, Pacific Northwest and Northern Ontario increase the risk of respiratory disease, heart attacks and stroke, while the mental health stress on those impacted by drought, such as farmers in Manitoba, is significant, and increasing. 

As the healthcare sector reckons with these new and costly challenges, it’s clear that it cannot afford to be a major contributor to the causes of the climate crisis. As Healthcare Without Harm president Gary Cohen says, “you can’t have healthy people on a sick planet.” 

As climate-caused effects on public health increase, it is likely that carbon-reduction regulatory requirements will be enforced in many industries, including healthcare. An ESG strategy can support healthcare providers to gain insights into the practices that have the greatest carbon impact, and plan, resource and measure remediation actions. As well as limiting contribution to the climate crisis, an ESG strategy can reduce risk and the cost of compliance and help to crystallize the organization’s values, supporting strong decision-making, facilitating funding and improving the attraction and retention of staff. 

Social Sustainability in Healthcare

The healthcare sector sits very neatly within the ‘social sustainability’ element of ESG. However, the past eighteen months have revealed significant opportunities for the sector to broaden its focus and consider who its stakeholders are when it comes to caring for society.

At the macro level, the pandemic has lifted the veil on inequitable social conditions that lead to poor health outcomes. Lack of paid sick leave for lower income workers, who typically live in denser communities and are less likely to have access to healthcare benefits (or even time to see a doctor) has caused unnecessary spread of disease amongst already marginalized and racialized groups.

At a micro level, healthcare workers are experiencing unprecedented burnout. A recent survey of Ontario nurses revealed that nearly 16% are considering leaving the profession – over three times the usual attrition rate of 5%. With employee engagement levels already low, the pandemic has dealt a significant blow to those in caring professions.

Using an ESG framework allows organizations to assess and manage their social impact across all major stakeholders, from valued employees to those thrown into the system due to Covid, or mental health issues caused by isolation and anxiety. By anticipating these impacts and prioritizing social sustainability, organizations can put plans in place to support staff, clients and communities. This lowers stress on already stretched systems, supports higher quality decision-making and can reduce the costs associated with turnover or rapidly pivoting responses to changing social situations.

Governance sustainability in healthcare

Healthcare in Ontario is undergoing major changes. The creation of local Ontario Health Teams (OHTs) will bring community experts in multiple disciplines together, with the aim of treating the whole person, improving the sharing of patient information and creating seamless care networks.

While this level of change is hugely challenging, it also presents unique opportunities for providers to not just cooperate, but thrive. New operating arrangements create the potential for shared governance and resources, lowering overheads and improving communication. The sharing of patient information invites new technologies that will not only improve the patient experience, but have the potential to reduce administrative workload and provide better working conditions for staff.

Governance is the third pillar of ESG sustainability, and the changes currently underway offer a once-in-a-generation chance for healthcare providers to step back and assess the systems, structures and policies that turn the wheels of their organization, and to consider new ways of operating that will allow them to thrive well into the future.

That said, it doesn’t take major policy change to implement sustainable governance practices. Whether it’s moving beyond philanthropy to a model that prioritizes an organizational reputation that attracts investment and funding in all forms, to auditing benefits or board-level recruitment procedures to facilitate more diverse leadership, sustainable governance can create long-lasting improvements for healthcare organizations.

Healthcare plays a vital and proud role in Canadian society. However, the sector is at the epicentre of major social and environmental shifts that will impact its ability to deliver at the same level in years to come. Adopting ESG early can provide the framework needed to adapt and thrive in an unpredictable and fast-paced world.