“Sustainability” has been a part of the hospital administration lexicon for decades. Indeed, the Association of American Medical Colleges says that the “greening of hospitals” began as early as the 1970s – in the form of basic recycling.
And while environmental efforts are a critical component of sustainability, on the heels of a global pandemic, it’s become increasingly clear that for today’s hospitals and healthcare systems to thrive, industry leaders must expand their thinking on what makes an organization “sustainable.”
In this article, we’ll be assessing the following:
- How ESG policies impact employee well-being and retention in healthcare
- The current state of ESG in healthcare
- Three steps to incorporate ESG practices in healthcare facilities
How ESG Policies Impact Employee Well-Being and Retention in Healthcare
These days, it’s no secret that healthcare facilities, specifically hospitals, are plagued by critical staffing levels and complex supply chain shortages. If these challenges aren’t addressed, they will fundamentally threaten the sustainability of the industry – and its ability to serve the communities they are tasked to protect.
Effectively addressing these existential threats starts with the adoption and implementation of more comprehensive Environmental, Social, Governance (ESG) policies that prioritize (and publicize) an organization’s social impact.
Studies show that improving social impact metrics – including employee well-being, worker safety, and staffing diversity, equity, and inclusion (DEI) – directly addresses key issues hospitals are currently facing and positively influences their long-term performance. Among other benefits, value-driven organizations have greater retention and recruitment opportunities, and hospitals should take note.
This is not surprising, considering that almost 75 percent of today’s workforce say they want to work in organizations that are actively making meaningful contributions to society.
The Current State of ESG in Healthcare
While many healthcare systems are implementing some elements of ESG, most haven’t built a comprehensive framework that addresses ESG across the entire organization. When approached holistically, organizations can optimize and fortify these efforts while setting expectations and holding leadership accountable through formalized goals and measurement.
According to Witold Henisz, Deloitte & Touche Professor of Management at the University of Pennsylvania and an expert on ESG at corporations, “The ESG framework is not just a label. It gives you goals that you should allocate resources to and then measure and monitor that.” Moreover, Henisz asserts, “If you have the capacity to provide health services to patients, you have the capacity to assess and look at ESG impacts.”
In one strong indication of the limited role ESG currently plays in healthcare, a 2022 survey of hospital leaders by Canam Research revealed that sustainability consistently ranked last in organizational importance, while worker safety programs ranked first.
The study, which interviewed executives and managers representing 50 North American hospitals of varying sizes, indicates that hospital leaders are prioritizing employee well-being without necessarily linking that priority to a more comprehensive and sustainable ESG approach.
While employee wellbeing is, indeed, critical, it has many varied facets, and if it isn’t being addressed as one part of a much larger effort, then the strength of an organization can still be compromised.
By thinking more holistically about ESG – and implementing programs in a more seamless and integrated way – hospitals can ensure that advances made in one area aren’t being undermined by deficits in another.
Three Steps to Incorporate ESG Practices in Healthcare Facilities
Here are some key steps that can help initiate this process in its earliest stages – in a sustainable way.
Step 1: Establish a Dedicated and Diverse Employee-driven Team
Hospitals, and the broader health systems they operate within, require many different departments to function, and these departments can be notoriously siloed. Before an effective ESG framework can be created and implemented, these silos must be minimized, communications channels established, and motives set.
The best way to do this is to form a singular team comprising individuals from a wide range of departments, disciplines, skill sets, and levels, who can represent and unite different departmental interests, perspectives, values, and agendas.
Identifying people committed to this effort is crucial to providing ESG programs with the substance and momentum they need to succeed in both the long and short terms.
In this way, organizational ESG programs become employee-driven, not corporate-led – and that reframing makes all the difference.
Pro-tip: The fastest way to identify those who will be most motivated is through employee surveys that tell you who places a premium on ESG initiatives and, as a result, will be most likely to remain organizationally loyal when the right ESG programs are in place.
Step 2: Identify and Build Employee-resonant Programs
Once a unified team has been identified and onboarded, you can begin to determine what ESG programs are needed in the context of the entire organization.
Existing ESG-related programs should be audited and assessed for efficiencies, synergies, and redundancies; shortfalls should be identified; employee interests should be factored; and priorities should be established based on the organization’s greatest risks and needs – and the ESG team’s desires for change.
Pro-tip: Surveys should be strategically designed to identify the issues employees are most passionate about and build ESG team agendas to reflect those passions. This way, organizations can ensure that the team remains motivated to make meaningful changes.
Step 3: Facilitate Better Measurement and Evaluation
After programs have been built and established, ongoing measurement and evaluation based on standardized approaches becomes paramount to ensuring these programs can and will affect meaningful organizational change.
The classic saying ‘What gets measured, gets managed’ applies here. While global standards for ESG programs are continually evolving, hospitals have several options to help guide their process. Among the choices, common reporting frameworks that exist today include those by:
- GRI (Global Reporting Standards): an internationally recognized framework of standards for reporting on sustainability with requirements, recommendations, and guidance on 900 sustainability topics;
- CDP (originally the Carbon Disclosure Project): one of the largest investor-led reporting frameworks used internationally; and
- IRC (Integrated Reporting Council): an integrated reporting framework that examines how an organization’s strategy, governance, performance, and prospects lead to the creation of value in the short-, medium-, and long-term.
With structures in place to address focused areas, teams can measure more effectively. Critical to this stage: finding a process that helps staff at all levels input and access data and identifying a program that shares timely insights in an easily understood interface.
Pro-tip: Employing a digital platform for this purpose can facilitate faster evaluation and assessment of an entire ESG agenda, which can be critical to its overall efficacy and sustainability.
With regular evaluations, areas for improvement can be identified and addressed faster and more efficiently, while accomplishments can be celebrated and shared. And when employees can see how value–driven priorities are brought to life – and know they are at the center of that change – they become more motivated to support, foster, and evangelize an ESG culture that positively impacts the organizations and industries at large.