Hospitals and ESG
The author is the president of SNU Dental Hospital.
In the early 2000, the World Health Organization (WHO) had warned that climate change and infectious diseases would pose serious threats to humanity. Its words were realized as the global community is wrangling with Covid-19 and extreme weather conditions from climate change. The sustainability and prosperity of the mankind can no longer be guaranteed without global endeavors.
A global response to global challenges brought forth the sustainable development concept led by the United Nations towards the late 20th century. Now, guidelines for special actions are in the works. The buzzword during the pandemic had been ESG, which stands for environmental, social and governance. The concept has become a norm for companies.
Companies no longer can be viable and successful by simply managing their accounts well. Instead, non-finance aspect has become critical. Companies can be deemed “sustainable” when their business is friendly towards the environment and managed so that employees are treated fairly and transparently while returning its earnings to the society. Such companies are judged to be worth investment.
Larry Fink — the CEO of BlackRock, the world’s biggest asset manager, with $9 trillion under its management — vowed to put a high priority on corporate action to deal with climate change when the company invests. ESG has become central in capital investment.
ESG has also gained traction in Korea. The Financial Services Commission (FSC) requires listed companies to disclose their ESG activities from 2030. The Ministry of Strategy and Finance plans to force public enterprises to regularly report ESG commitments.
For medical institutions to comply with the ESG management, digitalization can be the first step. Hospitals are required to procure low-carbon and eco-friendly items and expand the paperless environment through electronics and digital means. But they must not neglect the “social” aspect of tending to senior citizens and disabled who could be disadvantaged in the broader digital environment.
On the social aspect, medical institutions basically must be true to their fundamental role of caring for the public health. They must pay microscopic attention to the rise in medical costs and health inequalities in a society with the fastest aging and lowest fertility rate. Single-living seniors and other underprivileged people require special care. Medical institutions must do their best to create customized jobs for the needy and hire the disabled.
On governance, medical institutions are in the best position to share the information the people wish to know, not to mention ensuring transparent decision-making. Appointments should be reliable by guaranteeing gender equality and fair opportunities. Auditing advisory bodies with outside experts should be institutionalized for the health of the organization and efficiency. As public institution’s role is to promote public interest, their role is in line with ESG themes.
SNU Dental Hospital has been the first to declare ESG management and launch an ESG committee. Each hospital division has been required to present ESG commitments and draw up key performance indexes that can be used on patients. Once the index is drawn up, the hospital plans to share the guideline with other medical companies to contribute to the spread of the ESG theme throughout medical society.
Translation by the Korea JoognAng Daily staff.