Environmental and Social Due Diligence in Healthcare Industry
Due diligence refers to the process of exercising proper and reasonable care before entering into any business venture or operation. Due diligence is a critical component in corporate decision-making and formulating corporate strategies, as it ensures that the business framework complies with the prescribed standards and regulations. Environmental and social due diligence in healthcare industry is required to help healthcare organizations address their significant environmental footprint.
In a world increasingly affected by environmental and social factors, an important branch of due diligence that has gained attention is Environmental and Social Due Diligence (ESDD). In their quest to align themselves with the future of sustainability, ESDD has become an essential strategic imperative for businesses. Environmental and social due diligence is a process of investigation undertaken to assess the sustainability and social impact of a business's operations and practices. This allows businesses to evaluate new ventures, investments, or projects and identify the possible risks and liabilities associated with them, thereby allowing them to adopt mitigation strategies well in advance to save future costs and losses.
Between the changing regulations, ongoing environmental and social crises, and healthcare system failures in many parts of the world due to the pandemic, environmental and social due diligence in the healthcare industry has now come to the forefront in recent years.
Need for Environmental and Social Due Diligence in Healthcare Industry
Environmental and Social Due Diligence in healthcare industry is becoming an increasing concern due to the robust expansion and growth it has experienced in the last few years. The aftermath of the recent pandemic, which the world is still struggling to recover from, particularly highlighted and showcased the need for delivering medical and healthcare even more effectively. The world saw the healthcare systems, global supply chains of drugs and vaccinations, and hospitals reaching their capacity.
All this makes us wonder about the inefficiencies and unsustainable practices that are being followed in the industry, whose repercussions can not only be severe but rather fatal. This excites sustainable healthcare advocates to raise their voices for environmental and social due diligence in the healthcare industry, as it has some deep-rooted concerns that need to be addressed, as they pose a serious challenge to sustainability and the viability of the industry.
Let us take a look at a few of these reasons that make it imperative to conduct environmental and social due diligence in healthcare industry:
- Environmental Risks
The healthcare industry significantly impacts the environment owing to its large amounts of greenhouse gas emissions, resource depletion, and waste generation. As per the research conducted, the healthcare industry alone is responsible for almost 5% of the global greenhouse gas emissions and has a huge carbon footprint.
This contributes significantly to climate change and environmental pollution, and the irony is that it eventually deteriorates human health, thereby increasing the burden on limited healthcare resources. Therefore, there is clearly a need for adopting sustainable practices and conducting environmental and social due diligence in the healthcare industry to mitigate these concerns.
- Social Risks
Social issues are equally important, if not more important; hence, the concerned stakeholders cannot escape these apprehensions. The healthcare industry owes a social responsibility to society as well as the healthcare providers, and concerns like unequal access to healthcare, hazardous and unsafe working conditions, upholding ethical standards of practice, etc., are required to be addressed and mitigated as well.
In this increasingly conscious world, principles of diversity and inclusion have become more important than ever; therefore, there is a need to incorporate mechanisms in place to ensure the implementation of these principles. Apart from the usual environmental and legal responsibilities attached to every other industry, there is an additional ethical and moral responsibility attached to the healthcare industry because of the very nature of the essential services it renders.
- Reputational Risks
The healthcare industry is often criticised for its inadequacies and socio-economic approach. The failure to integrate the social and economic inequalities into their decision-making is something that tends to have a negative impact on their reputation and, thereby, on their business. This is yet another reason that necessitates environmental and social due diligence in the healthcare industry, as this will ensure that these reputational risks are mitigated by keeping track of your business decisions.
- Increased Regulatory Compliance
As environmental and social due diligence continues to gain importance amongst investors and as government and concerned regulatory bodies are necessitating compliance towards ESDD, businesses and enterprises will need to ensure they adopt practices pertaining to environmental and social due diligence in the healthcare industry. With the current wave of ESDD compliance, that time is not far away when investors will be interested in putting money only after vetting the ESDD targets and strategies of a company.
Therefore, environmental and social due diligence in the healthcare industry has become an imperative aspect of corporate strategy. By incorporating these requirements for environmental and social due diligence in healthcare industry, these companies and the businesses involved can not only meet the expectations of their investors and stakeholders but, at the same time, drive positive change.
What does the Data say?
Environmental and social due diligence in the healthcare industry has garnered enthusiastic support and response globally. Post-pandemic, the health industry has been grabbing many eyeballs, and the industry is being monitored up close. The digital health market is expected to reach $946 billion by 2030, with a 22.2% CAGR. The market for smart healthcare is likely to reach $385.28 billion by 2030.
The government has allocated US$11.50 billion to the healthcare sector in the Union Budget 2025-26. It clearly indicates a 9.78% increase from the previous allocation of US$ 10.47 BILLION in FY25. In addition to this, the Indian government is all set to introduce a credit incentive programme worth Rs 50,000 crore to support the healthcare infrastructure of the country.
These figures stand testimony to the fact that the healthcare Industry in India has tremendous potential for growth and has, in fact, become a foremost medical tourism hub for the world. With its significant share of the market growth, it needs to be monitored up close. Therefore, planning to invest in environmental and social due diligence in the healthcare industry is going to serve you well because of the potential growth perspective.
Nevertheless, conducting environmental and social due diligence in healthcare industry can be complicated and quite challenging, and this arduous compliance requires expert guidance and technical know-how that comes from years of professional experience. Therefore, businesses engaged in the healthcare industry often feel the need to outsource their environment and social due diligence to avoid any inadvertent fiascos on their part.
How Can Businesses Prepare for ESDD in Healthcare Industry?
In a world increasingly affected by numerous environmental and social factors, ESDD can offer an effective solution to companies and businesses across sectors to evaluate their risk profile and help them take a look in the mirror regarding their ethical and sustainable practices. ESDD in healthcare industry has a critical role to play.
In the coming times, with even stricter monitoring and regulations, businesses will have to adapt to the changing corporate landscape and make proactive efforts to ensure compliance pertaining to environmental and social due diligence in the healthcare industry. According to a survey conducted by RBC Global Asset Management, more than 70 per cent of institutional investors believe that ESDD-integrated portfolios are likely to perform better than non-ESDD-integrated ones.
ESDD is not a passing trend, and it is here to stay! Thus, to gain the upper hand over your competitors, you can start preparing and investing for the future of environmental and social due diligence in the healthcare industry today by adopting the following techniques:
- You, as a business entity, must adapt to the changing notions of due diligence. The ways of doing business have changed drastically, so you have to change, or the change will change you. You need to adapt to these new technological advancements being made and newer compliance being introduced to make the corporate world responsible for its actions.
- To ensure you keep up with the changing environmental and social responsibility standards and industry trends, businesses must integrate environmental and social due diligence in their vision and corporate strategies.
- To further stay afloat and attract investors and capital for your business, you must have a system in place to stay abreast of the developments taking place in your specific industry and to comprehend the expectations of the concerned stakeholders like investors, employees, regulatory bodies and clients and form your gameplay accordingly.
Thus, in order to secure your sustainable future, businesses must focus on strategizing for environmental and social due diligence in the healthcare industry to gain that extra mile advantage against their business counterparts, who are probably already proactively working to secure their position, considering the impressive strides the industry contributors are making in adopting ESDD guidelines.
There may be plenty of challenges when it comes to conducting environmental and social due diligence in healthcare industry. Even if we have established how beneficial ESDD will be for your business, it is easier said than done. Post-pandemic, when the long-standing practices failed, which added an extra burden on the healthcare industry, the world witnessed these shortcomings and challenges under the magnifying glass.
Therefore, the industry is still struggling with various challenges and shortcomings, and there is a wide gap between rhetoric and real action, which is only widening due to enterprises facing the following challenges in environmental and social due diligence in healthcare industry:
- Difficulty in Evaluating Risks
The healthcare industry has broad categories of risks associated with it, and depending on the size of your organisation, type and complexity of your business operations, etc., you are required to conduct ESDD accordingly. To identify and analyse these risks, you require resources to brainstorm and devote adequate time, which not every organisation can afford. Even if you manage to do that, risk analysis needs the eye of an expert, which you may not have.
- Inadequate Data Collection
One of the major challenges faced by businesses in conducting environmental and social due diligence in the healthcare industry is collecting relevant data due to a lack of proper resources, tools, and technology. The data available is often fragmented and siloed, creating an urgent need for the effective collection of standardised data.
Although it may not seem so important right now, improper or poor data can lead to inaccurate analysis and poor decision-making, which can cause even bigger troubles for your organisation.
- Complex Regulations
The government and concerned regulatory authorities have placed a myriad of regulations and compliance requirements in the healthcare industry that need to be taken care of while running business and corporate operations. On top of that, constant amendments and updates keep getting introduced to keep up with the times and issues. This makes it extremely challenging for businesses to identify and interpret all relevant regulatory compliance and stay up-to-date with these ever-evolving frameworks.
- Difficulty in Stakeholder Engagement
For conducting effective environmental and social due diligence in the healthcare industry, there has to be regular engagement with the concerned stakeholders, as this allows you to gather the relevant data and maintain a healthy relationship.
ESDD compliance will be incomplete without incorporating the expectations of these stakeholders, as the same is central to promoting accountability and reasoned decision-making.
- Complex Supply Chains
The healthcare industry has a very complicated and fragmented supply chain, making it challenging for the industry to maintain accountability and sustainability. This complexity makes it even more difficult to define and formulate effective ESDD strategies that can track progress and identify loopholes.
With limited resources and technology, conducting environmental and social due diligence in the healthcare industry on your own can be a daunting task.
We understand that these challenges can be quite burdensome, and mitigating them cannot be a simple undertaking; the same cannot be achieved instantly. Allow us to join hands with you so that we can provide you with cutting-edge solutions that are central to promoting sustainable and responsible practices.
Benefits of Environmental and Social Due Diligence in Healthcare Industry
Given below are the benefits of environmental and social due diligence in healthcare industry-
In today's increasingly conscious era, environmental and social responsibility have emerged as a significant factor for a corporate enterprise or organisation to ensure its sustainability and economic viability as well. Businesses across industries are recognising the importance of adopting sustainable and responsible practices, and the healthcare industry is no exception.
As discussed earlier, the significance of conducting environmental and social due diligence in the healthcare industry cannot be overstated. Therefore, by incorporating comprehensive assessments of the environmental and social impacts of your business decisions, you can reap the following benefits:
- Attract Enhanced Investments
Investing in environmental and social due diligence in the healthcare industry can be an added incentive for the businesses concerned, as it helps them attract capital and investments. Investors across the globe prefer those businesses and companies that have integrated ESDD into their business portfolios over those that haven't. Consequently, these institutional investors make conscious efforts to use the ESDD metrics and standards prescribed to identify the companies and businesses that have more sustainable models and are likely to be economically viable in the long run.
- Reduction in Cost
Identifying and analysing any potential risks associated with business operations or new projects becomes necessary because, in a worst-case scenario, they might end up costing you a business venture or jeopardising your reputation in the future. Failure to comply with regulatory ESDD compliance may also lead to hefty fines and penalties. By conducting environmental and social due diligence in the healthcare industry, businesses can mitigate future risks, reduce costs associated with resource consumption, lower the chances of deals going bad, and avoid penalties.
- Enhanced Operational Efficiency
Operational efficiency could be the key to success for businesses across sectors. If you are aiming for increased profitability and streamlining your business activities, you require a team of experts guiding you to navigate through complex and challenging domains like ESDD. By outsourcing your ESDD needs to a well-reputed firm like ours, you will be better positioned to handle your other core business operations.
- Enhanced Reputation
In today's turbulent times, a positive reputation is invaluable. Demonstrating a strong commitment to environmental and social responsibilities can enhance your brand value and image in the industry. Studies conducted across the globe show that around 70% of customers or clients prefer to support or switch to brands and companies that prioritize environmental and social factors in their business decisions.
- Ensured Regulatory Compliance
The healthcare industry is monitored and regulated closely because of the numerous possibilities of non-compliance and regulatory violations that can have dire consequences for society.
Conducting environmental and social due diligence in the healthcare industry ensures that you stay in compliance with the ever-changing rules and regulations in order to avoid any adverse legal consequences that could disrupt your business operations.
Therefore, as the world continues to adapt to these changing domains, the companies and businesses involved in the healthcare industry also need to stay ahead of the curve in order to prepare for the future of sustainable growth. This can be made possible by making enthusiastic efforts and prominently investing in environmental and social due diligence in the healthcare industry.
Our Services for Environmental and Social Due Diligence in Healthcare Industry
Our package for environmental and social due diligence in healthcare industry provides a wide assortment of services for your particular business needs. These are:
- Comprehensive Risk Management
After analysing and identifying the potential and hidden risks associated with your business operations, there is a need to have a comprehensive risk management program in place. We at Enterclimate understand that it is impossible to eliminate risks completely, but we can help you have effective risk management plans and strategies in place so that you can quickly cope with any sudden or urgent risks with the help of our experts.
- Comprehensive Regulatory Compliance
The healthcare industry is regulated by numerous laws and regulations. With constant amendments and changes, the process of compliance can get daunting for businesses. Our team of bespoke experts specialises in all the regulatory compliances and licensing associated with your particular industry, thus enabling you to stay abreast of every recent industry and regulatory development.
- Data Analysis and Reporting
Conducting environmental and social due diligence in the healthcare industry requires going through a huge amount of raw data and analysing it to find potential risks and patterns. Data analysis and reporting help your enterprise in strategic decision-making by identifying potential risks and making predictions. Our experts guide you through this process to ensure ESDD compliance.
- Social Impact Assessment
The healthcare industry is labour-intensive, and service providers that prioritise the social impacts of their corporate decisions—such as employee pay, safe working conditions, and effective training—tend to attract more support from stakeholders, including investors and customers, and experience fewer disruptions. Our team of experts aids organisations in conducting social impact assessments and handling all related compliances.
- Formulating an Active Plan of Action
Putting together a comprehensive action plan for achieving environmental and social due diligence in the healthcare industry is critical. A clear outline avoids ambiguities and confusion, helping you succeed in the long run. Our experts help you design a tailored action plan that lays out the entire roadmap for your ESDD journey.
- ESDD Reporting
Performing risk assessment and analysis alone is not enough. Organisations must implement risk-mitigating strategies and ensure ESDD obligations are duly discharged. ESDD reporting becomes a critical element of environmental and social due diligence in the healthcare industry. Our experts provide comprehensive and accountable ESDD Reports that reflect your commitment to sustainable corporate practices.
Other Key Services for ESDD in Healthcare Industry
In addition to the services mentioned above, Enterclimate can help you with the following other services that are provided by our bespoke team of experts, such as:
- Expert Guidance
Enterclimate experts can guide you in finding the right solutions and strategies for your sustainability growth. With decades of experience, they are well aware of the challenges you might face and are familiar with the best practices prevalent amongst your business counterparts.
- Documentation
Conducting environmental and social due diligence in the healthcare industry requires compliance with various regulations and laws, involving a significant amount of paperwork. A layman may make mistakes under such burdens, but our experts handle the entire process of documentation to ensure timely submissions and adherence to all requirements.
- Customised Solutions
At Enterclimate, we understand that your needs are exclusive and explicit, and so are our solutions. Our comprehensive plans and strategic decisions are carefully curated for your specific business needs and goals to help you progress on the path of constant growth.
- Real-time Updates
With Enterclimate by your side, you can stay informed at all times through our interface. Our staff ensures that clients receive real-time updates and remain fully in the loop throughout the process, eliminating the need to chase information from multiple sources.
Why Enterclimate for ESDD in Healthcare Industry?
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By choosing Enterclimate for ESDD in healthcare industry, you can explore a range of benefits that will enable your business or company to thrive in today's extra competitive world. Our team of seasoned experts bring extensive knowledge and decades of experience to the table and especially have a proven track record of 99.8% efficiency in conducting environmental and social due diligence in the healthcare industry. |
Our team at Enterclimate stays abreast of the latest regulations and compliance to ensure your business remains compliant and avoids any inadvertent mistakes and failures. We maintain strict ethical standards and therefore guarantee to provide you with world-class services and valuable and unbiased insights. |
Our success-oriented approach has allowed us to serve a vast global client base, as we have established ourselves as their trusted partner for catering to all of their business needs. We have successfully emerged as a one-stop solution platform for all minds of business queries and problems, so in case you would like to discuss and learn more about Environmental and Social Due Diligence Services, please don't hesitate to contact us. |
FAQs on ESDD in Healthcare Industry
Environmental and social due diligence is a process of investigation undertaken to assess the sustainability and social impact of a business's operations and practices. This enables businesses to evaluate new ventures, investments, or projects and identify the possible risks and liabilities associated with them, thereby allowing them to adopt mitigation strategies well in advance to save future costs and losses.
The healthcare industry significantly impacts the environment owing to its large amounts of greenhouse gas emissions, resource depletion, and waste generation. As per the research conducted, the healthcare industry alone is responsible for almost 5 % of the global greenhouse gas emissions and has a huge carbon footprint. This contributes significantly to climate change and environmental pollution, therefore, there is clearly a need for conducting environmental and social due diligence in the healthcare industry to mitigate these environmental concerns.
Applying and integrating ESDD in the healthcare industry can be a complicated and daunting task due to the inherent risks and challenges present within the industry. Nonetheless, with the increasing demand for ESDD compliance, many businesses and companies involved in the healthcare industry have started incorporating ESDD in their business strategies by performing risk assessments to assess the sustainability and social impact of their business operations and implementing mitigation strategies to save themselves from future losses.
Yes, conducting ESDD allows healthcare facilities to identify and assess the potential risks involved with their business operations and undertakings, and thereby plan for implementing risk mitigation strategies to handle these potential or hidden risks in advance.
The social element of environmental and social due diligence in the healthcare industry ensures that healthcare service providers uphold and maintain ethical standards, adopt sustainable practices, ensure transparency and accountability, and prioritise patient health and safety.
Improper waste management in the healthcare industry can potentially lead to adverse health effects, thereby affecting the patients, healthcare workers and service providers, and ultimately the society at large. By conducting environmental and social due diligence in the healthcare industry, it can be ensured that organisations adopt sustainable medical disposal methods in order to reduce environmental pollution and consequent health hazards.
Yes, conducting environmental and social due diligence in the healthcare industry certainly helps manage and enhance the reputation of the healthcare providers, as the same stands as a testament to the fact that these healthcare organisations are committed to prioritising the environmental and social impacts of their decisions and business operations and to adopt sustainable practices, rather than only minting money.
Implementing environmental and social due diligence in the healthcare industry is often hindered due to numerous challenges, some of which are difficulty in risk identification due to lack of resources, technological and time constraints, difficulty in assessing the right risk mitigation strategies, complexity of supply chains, etc.
Yes, environmental and social due diligence in the healthcare industry can lead to operational cost savings as conducting ESDD involves adopting environmentally-friendly measures such as reducing energy consumption, relying on renewable resources, better waste management, recycling and reusing resources, adopting environmental and social risk mitigation strategies that prevent you from future fines and penalties, etc.
Yes, ESDD evaluations have been shown to affect healthcare partnerships and mergers, as companies with strong ESDD metrics are likely to attract competitive investors and command higher valuations. According to a survey conducted by RBC Global Asset Management, more than 70 per cent of institutional investors believe that ESDD-integrated portfolios are likely to perform better than non-ESDD-integrated ones.
