In May, Diaverum released its 2022 ESG report. Nick Herbert caught up with the firm’s global ESG manager, Stephanie de Sury, to discuss the integration and importance of ESG to the company’s strategy and its impact on the industry in general.
Regulators, shareholders, staff and the wider public have a good idea as to the characteristics of an environmentally and socially responsible company ‒ and they are becoming more demanding.
Healthcare organisations, which already sit at the heart of the Environmental, Social and Governance (ESG) challenge, are responding to this heightened scrutiny by improving ESG strategies and reporting transparently against key indicators. Non-financial reporting is a tool by which firms can provide greater clarity to stakeholders as to their ESG performance. It is a means of increasing transparency, accountability and differentiation.
The Swedish-born, multinational healthcare organisation’s report shows how the firm’s focus on progressing its ESG agenda has become more important due to the global pandemic, the war in Ukraine and the resulting economic recession.
Chronic Kidney Disease (CKD) is one of the leading causes of death worldwide, the impact of which is felt primarily in low and middle-income countries. It presents a global and escalating challenge that affects about 10% of the world’s adult population, and it’s estimated that the number of people requiring dialysis will grow at approximately 6% every year by 2025.
The societal and economic challenges created by these events pose health and well-being risks to patients, staff and communities alike, while placing an increasing strain on healthcare systems.
Diaverum places great importance on the impact it has on the environment as well as the communities it serves. It is accelerating its ESG journey.
Since 2021, Diaverum has aligned its ESG report with the Sustainability Accounting Standards Board (SASB) – Health Care Delivery Industry Standard. Its 2022 ESG report, provides the most comprehensive non-financial performance to date and includes clearer ambitions, solid governance controls information and a well-defined ESG roadmap covering its strategy and actions.
‘But it is not only about that,’ said Dimitris Moulavasilis, CEO. ‘This report is a means of holding us at Diaverum accountable for our commitments and impact on society and the environment.’
As part of its ESG acceleration, Diaverum hired Stephanie de Sury as global ESG manager, to take its ESG policies to the next level.
Before joining Diaverum, de Sury assisted companies in integrating ESG factors into their overall business strategies as a consultant with firms such as EY and PwC. Over the course of ten years, she developed a deep understanding of the importance of sustainability and its impact on business long-term success.
A desire to have a more holistic approach and contribute directly to a company’s ESG journey, she made the transition into a corporate role with Diaverum.
‘It is very important for me to work for a company where I feel aligned with its purpose and values,’ she said. ‘I am thrilled to contribute to the development of Diaverum’s ESG strategy, fostering a sustainable future for the company and the communities we serve.’
HMi What were your first impressions of what needed to be done, what was already being done well and where you could make a difference?
Stephanie de Sury (SdS) The company already had strong foundations in place, with ongoing, annual, non-financial reporting, as well as its own sustainability framework, based on its biennial materiality assessment.
Both S and G were in a higher maturity level, for example, with clear contribution to society through an ambitious health literacy programme and policies and controls, such as our Code of Conduct for employees and suppliers, to ensure responsible operations.
Looking ahead, we have developed a comprehensive roadmap to mid-2024 that outlines specific goals and actions, explained in detailed in our 2022 report. This roadmap focuses on:
- Aligning and further integrating the Sustainable Development Goals (United Nations 2030 Agenda) and Ethical Principles in Health Care (EPiHC) into our business development plans
- Reshaping our ESG reporting to be compliant with the Corporate Sustainability Reporting Directive (CSRD) according to the new European Sustainability Reporting Standards (ESRS), and preparing to subject it to external and independent third-party verification within the next two years
- Defining specific goals in each of our ESG framework pillars and improving the measurement of our impact on our key material topics
- Clarifying our environmental strategy for the medium and long term
- Cementing ESG principles within our ongoing value propositions
HMi There’s a big focus in the report on the S and G. What determined the choice of focus areas and where they sit within the hierarchy?
SdS When I joined the company, one of our immediate priorities was to conduct a new comprehensive materiality assessment that would identify and prioritise the key ESG topics most relevant to our business and stakeholders. This process involved engaging various actors, including our investor, board of directors, and senior management team.
By gathering their insights and perspectives, we were able to gain a comprehensive understanding of the ESG issues that matter most to our company and our stakeholders. Our choices were driven by two main factors: the significant impact they have on society, as well as their impact on our business performance. Based on the results of the materiality assessment, we established a clear focus on key areas within the ESG framework
When it comes to measuring our progress, we take a comprehensive approach. We utilise a combination of quantitative and qualitative indicators to track our performance and assess the effectiveness of our initiatives. This includes collecting data from various sources, such as internal systems, surveys, and external benchmarking. In terms of target selection and measurement, we are in an evolution process of evolving from ambitions to well defined and quantifiable targets in each area of our ESG framework: our patients; access to care; employees and well-being; operating responsibly; environment.
HMi How do you perform in terms of Scope 1, 2 and 3 GHG emissions?
SdS We have made significant progress in measuring our environmental impact. Our clinics do not have significant Scope 1 emissions as we do not use a lot of natural gas or other combustibles, but we recognise the importance of accounting for our direct green house gas (GHG) emissions and we are actively planning to report our Scope 1 emissions in the future.
In 2022, for the first time, we measured our indirect emissions from purchased electricity. Our total Scope 2 emissions amounted to 19,731 metric tons of carbon dioxide equivalent. This measurement provides us with valuable data to track and manage our electricity-related emissions.
We are also committed to assessing the impact of Scope 3 emissions.
To address the challenge of balancing our high energy requirements with emissions, we have implemented a comprehensive data monitoring programme. This programme enables us to assess the energy consumption of all our clinics worldwide. By understanding the specific energy profiles of each country, we can identify areas for improvement and implement energy-saving measures more effectively.
HMi What can you do to improve waste/water performance and how can you help the industry?
SdS We recognise the importance of reducing the amount of waste generated and maximising opportunities for reuse and recycling. In our clinics, various waste materials are generated daily, including PVC/silicone tubes, solution bags, dialysis tubing, medical sharps, and dialysers.
We have identified significant potential for reusing certain dialysis disposables that do not come into contact with blood, such as bicarbonate cartridges. One example of our efforts is in Germany, where we collaborate with our local supplier to refill the concentrate containers used to produce dialysate fluid. This initiative reduces the need for single-use containers and contributes to waste reduction.
It is important to highlight that haemodialysis – as a life sustaining treatment for CKD patients – uses large amounts of water. Water is required to prepare dialysate, clean and reprocess machines and membranes. It is common for 144 litres of water to be prepared for a dialysis session – treated, sterilised, and heated to body temperature – yet across the industry at many renal care centres worldwide 30%-50% of this water is discharged.
Some initiatives can be implemented to reduce our water consumption. For example, new methods of reverse osmosis allow us to reduce the amount of reject water that a traditional water treatment system produces when achieving the purity needed for haemodialysis. The reject water generated during reverse osmosis treatment can also be repurposed within our clinics, reducing water consumption and wastewater.
Furthermore, it is difficult to take some actions if you do not measure your impact. Smart water meters provide real-time monitoring and analysis of water consumption, enabling us to identify abnormal usage patterns and take corrective actions promptly. We have already implemented these technologies in Saudi Arabia and Spain.
HMi How do different countries view your approach to ESG?
SdS It is important to state that when entering new markets, we conduct thorough assessments that include several ESG aspects, including evaluating ethical aspects such as corruption exposure.
In some cases, we engage with external advisors to provide in-depth market analyses, enabling us to enter and operate in countries where we can uphold our true care values. During the due diligence process, we ensure that potential acquisitions comply with all applicable laws and regulations, including environmental and labour laws, waste management, workforce size, and employee rights and benefits.
At a global level, we are committed to cementing ESG principles within our ongoing value propositions and processes, ensuring ethical and compliance considerations related to environmental and social matters. To achieve this, we establish comprehensive global policies and procedures that are to be adhered to by all countries.
Nevertheless, we recognise that each country presents unique contexts and challenges. While maintaining our commitment to ESG global standards, we understand the importance of aligning our initiatives with local regulations and addressing community needs.
HMi What can you do to improve the health of underserved economies?
SdS There are three main challenges in improving the health of underserved economies.
First, they often face resource constraints, including inadequate healthcare infrastructure and skilled personnel. Finding sustainable solutions within these limitations can be challenging, requiring innovative approaches and leveraging partnerships to optimise resource allocation. Secondly, remote locations and inadequate transportation infrastructure can pose challenges in delivering healthcare services and accessing underserved populations. Finally, in regions with political or economic instability, ensuring consistent healthcare delivery can be difficult.
Building resilience and adaptability in the face of such challenges is crucial to maintaining continuity of care and sustaining health programmes.
At Diaverum, we are in the process of implementing access-level dialysis models to provide standardised care regardless of the market conditions. This approach will allow us to deliver three levels of care – essential, enhanced, and excellence – ensuring that patients receive the appropriate level of treatment. By setting well-defined standards, our aim to is provide support to new markets where dialysis access is currently limited, expanding our reach and improving healthcare outcomes.
Furthermore, we prioritise digitalisation and innovation to lower healthcare costs while maintaining and improving consistent and standardised world-class care. Education and awareness also play a vital role in improving the health of underserved economies.
We develop comprehensive educational programmes and materials to raise awareness about preventive measures, healthy lifestyles, and early detection of diseases.
Through partnerships with local healthcare professionals, community leaders, and schools, we can empower individuals and communities to take ownership of their health and make informed decisions.
HMi What are the next steps for Diaverum and the industry?
SdS Moving forward, Diaverum and the industry will face several key priorities and challenges. Chronic Kidney Disease (CKD) remains a pressing global issue, affecting a significant portion of the adult population and that proportion is increasing each year.
Moreover, the complexities of our world, including climate change, strained healthcare systems, and economic recession, further amplify these challenges.
In addition, the shortage of skilled healthcare professionals, such as nephrologists, nurses, and technicians, poses a critical obstacle in some countries. Finally, adapting to evolving ESG regulations while driving positive social impact is another crucial area of focus.
To address these challenges, innovation and digital technologies must be embraced to enhance patient care, improve operational efficiency, and drive better outcomes.
Preventive care and early detection efforts should be promoted to alleviate the burden on healthcare systems, emphasising awareness, regular screenings, and healthy lifestyles to mitigate the progression of renal diseases. Workforce development, training, and retention strategies are necessary investments to ensure a qualified and motivated workforce, positioning Diaverum as the employer of choice.
The lessons learned from the Covid-19 crisis highlight the importance to act fast in time of crisis. Robust continuity plans are crucial to effectively respond, manage, and recover renal facilities from any disruptions caused by climatic conditions or other risks such as utility failures or security threats.
Finally, sustainability and ESG considerations will remain at the forefront. Reducing greenhouse gas emissions, optimising waste and water management, promoting responsible supply chain practices, and ensuring ethical and transparent operations are ongoing priorities.
In summary, Diaverum and the industry must embrace adaptability and agility to navigate ongoing changes and challenges. By fostering innovation, prioritising patient-centred prevention and integrated care, addressing sustainability and ESG considerations, navigating regulatory landscapes, and tackling workforce challenges, Diaverum can drive positive transformation and shape the future of renal care.