Environmental and Social Due Diligence in the 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 this ensures that the business framework is as per the prescribed standards and regulations.
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 the Healthcare Industry
Environmental and Social Due Diligence in the healthcare industry is becoming an increasing concern because of the robust expansion and growth it has been experiencing 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 the healthcare industry:
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 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. Therefore, 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.
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 ESDD requirements, 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 health industry has particularly witnessed a substantial expansion worldwide, with its value increasing from USD 8.5 trillion in 2018 to USD 12 trillion in 2022. Witnessing this growth, the global investments in the healthcare industry had also doubled to almost USD 57 billion in 2021.
If we look at the Indian Health industry in particular, it was estimated to be around USD 372 billion in 2022, demonstrating an annual growth rate of 22 per cent. Within this industry, the opportunities for growth and investment have spiked in the last few years; for instance, the Indian health tech industry itself has showcased a remarkable growth of 39 per cent and is, in fact, projected to reach USD 50 billion by 2047, thereby outpacing all other segments of the Indian Healthcare Industry.
The size of the population of our nation also makes it imperative for the government and the concerned stakeholders to keep ensuring the growth in this industry. This can be substantiated by the fact that in its Union Budget for the year 2023-2024, the government has allocated INR 8.956 crores towards healthcare expenditure, and this amounts to an overall increase of 2.71 per cent. Apart from that, the government of India has taken many initiatives like Ayushman Bharat- Pradhan Mantri Jan Aarogya Yojana (AM-PMJAY), the world's largest government-funded healthcare initiative, to ensure healthcare and insurance for the citizens and at the same time invest in this industry.
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 the 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 the Future of Environmental and Social Due Diligence in the 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.
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 are of thought 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 their 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 strategising 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 strategising to secure their position, considering the impressive strides the industry contributors are making in adopting ESDD guidelines.
Challenges faced while complying with Environmental and Social Due Diligence in the Healthcare Industry
There may be plenty of challenges when it comes to conducting environmental and social due diligence in the 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:
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 in collecting relevant data due to a lack of proper resources, tools, and technology. The data available is fragmented and soiled, hence there is an urgent need for the effective collection of standardised data. Although it may not seem so important right now, but improper or poor data can lead to inaccurate analysis and poor decision-making, which can cause even bigger troubles for your organisation.
The government and concerned regulatory authorities have placed a myriad of regulations and compliance in the healthcare industries that need to be taken care of while running business and corporate operations. On top of that, constant amendments and changes keep getting introduced to keep up with the times and issues; thus, it becomes quite arduous and challenging for businesses to identify and interpret all relevant regulatory compliance on their own and stay abreast of these ever-evolving regulatory 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 centric to promote accountability and reasoned decision-making.
Complex Supply Chains
The healthcare industry has very complicated and fragmented supply chains, thereby making it even more challenging for the industry to maintain accountability and sustainability. This makes it even more difficult to define and formulate effective ESDD strategies that can keep track of the progress or 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 these cannot be a simple undertaking, and the same can 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 Outsourcing Environmental and Social Due Diligence in the Healthcare Industry
In today's increasingly conscious era, environmental and social quinella 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. As discussed earlier, 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. Other than that, failure to comply with regulatory ESDD compliance may lead to levying of hefty fines and penalties in the future, which you certainly don't want. Thus, by conducting environmental and social due diligence in the healthcare industry, businesses can not only mitigate future risks but can also reduce costs associated with resource consumption, reduce the chances of deals going bad and lower the chances of being penalised.
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 to ensure you don't stray from the path of glory. By outsourcing your ESDD needs to a well-reputed firm like ours, you will be better positioned to handle your other core business operations.
In today's turbulent times, a positive reputation is invaluable. Demonstrating a positive commitment to environmental and social responsibilities can enhance your brand value and image in the industry. Furthermore, as per studies conducted across the globe, around 70% of customers or clients prefer to support or happily switch to those brands and companies that hold environmental and social factors in high regard while making any commercial decisions.
Ensured Regulatory Compliance
The healthcare industry is monitored and regulated up close 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.
By choosing Enterclimate for environmental and social due diligence in the healthcare industry, you can unlock 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.
Our package for environmental and social due diligence in the healthcare industry provides a wide assortment of services for your peculiar 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 completely eliminate the possibilities of risks, and we don't claim to do that as well, but we do claim that we can help you have effective risk management plans and strategies in place so that you can quickly cope up with any sudden or urgent risks with the help of our experts.
Comprehensive Regulatory Compliance
As stated earlier, the healthcare industry is regulated by numerous laws and regulations. With constant amendments and changes, the process of compliance can get daunting for the businesses concerned. 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
It is well-established that 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, thus paving the way for enhanced business operations. Data analysis and reporting help your enterprise in strategic decision-making as the same allows the experts to identify any potential risks and make predictions regarding the same, and that is where our experts can step in and guide you to tread on this path of data analysis to ensure ESDD compliance.
Social Impact Assessment
The healthcare industry is known to be a labour-intensive industry as well; thus, service providers that prioritise the social impacts of their corporate decisions along with issues like employee pay, safe working conditions, proper and effective training, etc., tend to attract more support from the concerned stakeholders such as from investors and customers and are likely to experience fewer disruptions in their business operations as well. Our team of experts and professionals is adept at aiding organisations to conduct social impact assessments and handle all such related compliances as well.
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. To get the ball rolling, it is essential to have a clear outline in place to avoid any ambiguities and confusion, which will help you succeed in the long run. Our experts will help you design and formulate a comprehensive active plan of action peculiar to your goals and needs that will lay down the entire road map for your ESDD journey.
Performing risk assessment and analysis will not suffice. The organisations are required to effectively implement risk-mitigating strategies and make conscious efforts to ensure ESDD obligations are duly discharged. In order to achieve that, ESDD reporting becomes a critical element of performing environmental and social due diligence in the healthcare industry. Our experts can help you with this by providing world-class, comprehensive and accountable ESDD Reports that can stand witness to your commitment to sustainable corporate practices.
Other Key Services:
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:
Enterclimate experts can guide you in finding the right solutions and strategies for your sustainability growth as they hold decades of experience and, are very well aware of the challenges that you might face, and are familiar with the best practices prevalent amongst your business counterparts.
Conducting environmental and social due diligence in the healthcare industry is not as easy as it seems. It requires you to comply with various regulations and numerous laws, which involves a ton-load of paperwork. A layman is bound to make a mistake under the burden of red-tapism. Let our experts worry and handle the entire process of documentation and issues concerned to ensure timely submissions.
At Enterclimate, we understand that your needs are exclusive and explicit, and hence, so are our solutions. Our comprehensive plans and strategic decisions are carefully curated for your peculiar business needs and goals to help you tread on the path of constant growth.
With Enterclimate by your side, you can stay abreast of everything by keeping track of what is going on through our interface. Our staff ensures that our esteemed clients keep getting real-time updates and are kept in the loop the whole time, rather than making them run from pillar to post.
Start your Environmental and Social Due Diligence journey with a single step by reaching out to us at 7838390340, and we will assign a dedicated expert to discuss your requirements and clear your doubts.
We are eager to help you tread on this path and help you flourish in your industry domain. Connect with us today, and let's build an environmentally and socially responsible future together.
Frequently Asked Questions
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.
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 prioritise 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 which 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 are of thought that ESDD-integrated portfolios are likely to perform better than non-ESDD-integrated ones.