The Healthcare sector is a large sector both globally and regionally, as a percentage of UAE GDP. It therefore has a significant impact on public health and on the environment through the use of energy, water, and other resources needed to run healthcare facilities. In terms of products, pharmaceutical and medical devices are often single-use plastic products, creating waste and potential health impacts on the environment from drugs entering waterways.
Some key ways the sector can embrace sustainability are to find alternatives for single-use plastics in its products, reduce water consumption during pharmaceutical production, and transform healthcare facilities and operations to make them more sustainable and climate resilient. In the table below, we have mapped these and other key ESG issues against the sectors and subsectors.
| Subsector | Tertiary Categories | ESG Trends and Issues |
|---|---|---|
| Health Care Equipment & Services | Health Care Equipment & Supplies | Reusable devices, and recyclable single-use devices. Reducing packaging. |
| Health Care Providers & Services | Low carbon drug delivery service and take-backs. Low carbon real estate. Governance transparency and patient welfare. | |
| Health Care Technology | Reducing energy and using recycled or low carbon materials. Telemedicine and portable clinics. | |
| Pharmaceuticals, Biotechnology & Life Sciences | Biotechnology | Replacing hazardous chemicals with environmentally friendly alternatives. Investing in R&D initiatives. |
| Pharmaceuticals | Patient safety. Tackling pharmaceutical waste leaching into the environment. Improve diversity in clinical trials. | |
| Life Sciences Tools & Services | Sustainable procurement policies. Attracting and retaining talent. |
ESG issues are increasingly seen as important in the healthcare sector due to customer demand for greener, safer products. For instance, in the US, 62% of respondents to a PWC survey said that they would ‘view a company more positively if it was taking action to address social determinants of health’.
Then there are regulatory pressures for more sustainable pharmaceutical procurement throughout the drug product development, launch, and commercialization phases. This includes addressing the larger climate impact of the sector itself, with healthcare systems being responsible for approximately 4.4% of global carbon emissions, according to a report by Health Care Without Harm. These emissions can trigger extreme weather events associated with climate change, further impacting health and mortality in many regions. These factors among others, are behind the global regulatory push for more sustainable outcomes for the sector. For instance, in the UK, healthcare providers must develop three-year sustainability plans, and the NHS has set a target of Net Zero by 2040. In the US, the Health Sector Climate Pledge requires hospitals to reduce their GHG emissions by 50% by 2030.
The UAE has an estimated population of 9.2 million residents, while the UAE’s healthcare spending sits at 5.4% of GDP, making it one of the highest spending categories in the GCC. This is putting the UAE healthcare sector in the spotlight to ensure it can meet the growing demands for healthcare services and pharmaceuticals sustainably and resiliently. The UAE already has a number of vehicles to do this, namely its aim to become a medical tourism hub, its 2030 Industrial Strategy, its leading role in 3D printing, and its pioneering use of public-private partnerships in the smart health care sector. In fact, the UAE digital health strategy revolves around creating a patient-centered healthcare system with the help of advanced digital solutions, as part of its 2071 Healthcare agenda for change. In a recent EY study, industry dynamics include a shift in perspective toward wellness and prevention, disruptive new technologies, and changing care models. According to EY, there are five trends shaping the healthcare sector in the UAE, that can be harnessed for ESG improvements:
The UAE has seen an acceleration in the procurement of smart hospitals designed to operate on advanced digital systems. For instance, the Dubai Health Authority (DHA) runs two platforms (Dubai Health Authority App and Dubai Health Experience) designed to help residents manage appointments, access services, see lab results, find facilities, and peruse profiles of healthcare professionals. To support this, there is a burgeoning health tech start-up ecosystem in the UAE aimed at providing digital tools such as Nabta Health, which offer wearable innovations to empower patients to manage chronic conditions proactively.
To achieve higher ESG ratings healthcare players need to create a clear sustainability plan that can drive real impact. One case study is Burjeel Holdings, a leading private provider of healthcare services in the UAE, that was recently recognized for its strong commitment to environmental sustainability, earning an ‘AAA’ rating from MSCI.
This places it in the top 6% of global healthcare leaders for ESG excellence and was awarded for its successful reduction of environmental impact through innovative practices and solutions. It is also collaborating with the University of Oxford’s Said Business School to help improve healthcare delivery to vulnerable communities through telemedicine and mobile health clinics, in rural and underserved areas. This helps eliminate the need for long-distance travel, thereby reducing emissions, and access barriers to patient care. Its these types of holistic collaborative approaches to ESG impact that will become the norm in the sector in the years to come.
According to ‘Vision 2071 Life Sciences and Innovation’, retaining quality healthcare staff is the major social challenge in the UAE healthcare sector. To tackle this, it aims to build healthcare hubs where career development pathways create talent retention by becoming centers of excellence. This means healthcare providers and other players must get serious about ESG impact if they want to be considered as partners for these new UAE health centers of excellence. By leading on R&D, healthcare companies can demonstrate leadership and boost chances for collaborative public-private ventures.
In Conclusion
The healthcare sector is a critical lever for the UAE’s delivery of social sustainability goals and for the reduction of the environmental impact of both healthcare real estate and pharmaceutical products. ESG leaders should set out their sustainability vision clearly, aligned with the broader aims of Vision 2071 Healthcare for change, as well as addressing sustainable procurement aligned with the UAE Industrial Strategy, and wider Net Zero Goals. This will require a collaborative and comprehensive approach to harnessing ESG factors. To get started, Healthcare companies should:
The ESG integration task, while complex, is worth the effort. It has the potential to boost patient health and safety outcomes, retain talent, reduce emissions, and avoid costly stranded assets that will become increasingly incompatible with smart health approaches to patient care.
