EY-CII report reveals 67% Indian healthcare companies have set up ESG board committees, 53% pledge to sustainable sourcing

 

• Over half of Indian healthcare firms have embraced zero liquid discharge
• 18% of the energy utilized by healthcare providers now stems from renewable sources
• 21% of spending is dedicated to environmental and social activities in R&D

Mumbai, 14 March 2024: Highlighting a significant stride towards environmental responsibility, the latest report from EY and CII reveals that over half of Indian healthcare firms have embraced zero liquid discharge and implemented sustainable sourcing practices as part of their environmental, social and governance (ESG) commitments. Titled 'How can sustainability and ESG be the microscope and telescope in the Indian healthcare sector', the report underscores a noteworthy surge in renewable energy adoption and sustainable sourcing practices, indicative of a heightened awareness of environmental impact.

The report further unveils compelling statistics: 18% of the energy utilized by healthcare providers now stems from renewable sources, signalling a progressive shift towards renewable energy adoption. Additionally, 61% of inputs employed by these companies are sustainably sourced, underscoring a concerted drive towards responsible procurement practices. 53% of companies have also implemented zero liquid discharge (ZLD).

Moreover, the healthcare sector demonstrates a commitment to diversity and inclusion, with 41% of the female employees and 22% female representation on company boards. Furthermore, over 67% of the companies have established ESG committees, highlighting a proactive approach towards governance and sustainability initiatives within the sector.

Reflecting on the trends, Kaivaan Movdawalla, Partner and Healthcare Leader, EY Parthenon India said, “Sustainable progress in the healthcare sector requires a multifaceted approach, particularly through the adoption of lean and green energy practices. With healthcare being a high-consumption industry, it is crucial to streamline consumption needs through leaner staffing strategies, precise HVAC (Heating, ventilation and air-conditioning) control systems, and maximizing the utilization of green energy sources for a sustainable future. Moreover, rethinking packaging designs with a focus on green packaging to align with optimal environmental outcomes is essential. Effective and efficient disposal methods are essential for long-term sustainability and mitigating environmental impact. Given the urgency of addressing climate change and healthcare's pivotal role, stakeholders must act promptly. Our report offers timely and actionable insights, guiding the sector towards a resilient future.”

Nitesh Mehrotra, Partner, ESG & Sustainability, EY India, said, "Sustainability and climate change represent the most significant megatrends of our generation, impacting the healthcare ecosystem and its diverse stakeholders, including investors, customers, patients, regulators, employees, and value chain partners. To achieve sustainable progress in the sector, transitioning to renewables, embracing circularity, and establishing a net-zero transition plans are imperative. This will help in reducing carbon waste and delivering truly sustainable care. Healthcare providers and systems must now focus on reducing consumption and waste in their supply chains."

Notably, the report highlights increasing allocations towards environmental and social initiatives within research & development (R&D) and capital expenditure (capex). Impressively, 21% of spending is dedicated to environmental and social activities in R&D, showcasing a commitment to innovation and sustainable practices. Equally noteworthy is the allocation of 13% of spending towards environmental and social initiatives within capex, affirming a strategic commitment to infrastructure and operational enhancements for bolstering sustainability performance.

Dr Dharminder Nagar, Chairman, CII Northern Region Committee on Healthcare and Managing Director, Paras Health said “The intersection of healthcare, sustainability, and ESG principles is more critical than ever. As we navigate through the complexities of modern healthcare systems, it becomes increasingly evident that we must adopt a holistic approach. Healthcare generates around 5 per cent of hazardous waste. The healthcare sector must focus on following a transition plan that encompasses decarbonization; responds to climate risk; as also contributes to the economywide transition as short- and medium-term goals.”

The EY – CII report analysed 15 listed healthcare service provider companies, delving into over 1200 key performance indicators (KPIs) to provide valuable insights into ESG practices within the sector. These findings underscore the industry's dedication to sustainability and responsible business practices, reflecting a collective effort to foster positive change.