4 ESG Healthcare Trends to Know for 2023 from JPM

Environmental, Social and Governance (ESG) continues to be an important focus for the healthcare sector, and this was reflected during company presentations at the J.P. Morgan (JPM) Healthcare Conference held in San Francisco last month.

The ever-evolving world of ESG means that staying on top of trends in the space is essential. So, we set out to glean insights on how healthcare companies are prioritizing and communicating ESG topics and to understand shifts in priorities over the past year. To do this, Real Chemistry’s analytics team assessed the 2022 and 2023 JPM presentations of 17 biopharmaceutical and medical technology/diagnostics companies that actively communicate on ESG throughout the year. We focused on a broad range of ESG topics that are commonly considered to be material for the healthcare sector and used natural language processing to identify thematic communications on these topics. A high-level view of the most mentioned ESG topics is summarized in the chart below, and the full analysis can be seen here.

Most Mentioned ESG Topics in JPM Presentations, 2023 vs. 2022

Four ESG Healthcare Trends from Presenting Companies

1. ESG as a term was used less frequently. More mature publicly traded healthcare companies have built ESG principles into their operating frameworks and are making less overt references to the term.

Takeaway: While the use of the label ESG may vary, the underlying principles of ESG remain paramount and represent an area of investment among healthcare and other industry leaders. Companies must continue to prioritize sustainable, resilient practices that enable them to drive long-term value for all stakeholders and for the business.

2. Healthcare ESG focus areas are changing. Communication on access/affordability and employee recruitment, development and retention declined in volume by 50% compared to last year.

Takeaway: While access and talent remain important, there are external time-sensitive business risks facing healthcare companies that are pressing to the forefront, such as the continued supply chain disruption. Company leaders are doubling down on supply chain vigilance to ensure they can deliver their products to patients. It will be interesting to continue tracking this trend as employers look to balance their focus on short-term issues with other ESG focus areas – such as product affordability and talent development – that position them for long-term success.

3. There’s an increased emphasis on responsibility for the overall delivery of healthcare. Compared to last year, 2023 JPM presentations included a significantly higher volume of messaging related to health system strengthening and health education. This underscores the important role companies play within the broader healthcare ecosystem – including their efforts to ensure equitable access to medicines and care.

Takeaway: The spotlight is on healthcare systems to build ESG principles into the way they operate and serve. They rely upon their supply base (healthcare companies) to provide innovative solutions and partnerships. As we progress into a post-pandemic environment, companies are again focusing on core issues that are essential to the delivery of healthcare.

4. The spotlight is shifting: Over the past few years, diversity, equity & inclusion (DE&I); product safety, quality and supply; and the environment were top of mind for healthcare companies. However, these topics were less frequently mentioned in this year’s presentations.

Takeaway: Our perspective on these declines is that they are related more to the macro environment than to any change in priority. That said, there continues to be a focus on climate impact and building diverse and inclusive workforces that match patient populations. Nearly all 17 companies we examined have made public commitments to DE&I and the environment, created internal accountability, and are reporting year-over-year progress on all three of these areas. In 2023, we anticipate the SEC will finalize its requirements for reporting on environmental metrics, in addition to existing reporting related to diversity at the board and company levels – reinforcing that companies need to continue to focus on advancing their efforts and increasing transparency in these critical areas.

Overall, the trends we identified from JPM 2023 presentations confirm the continued importance of ESG within the healthcare industry. They also underscore an ongoing evolution in the way companies prioritize and communicate about ESG topics, which takes place in the context of a shifting economic, political and social landscape. As companies navigate this journey, we believe it is important that leaders stay focused on their companies’ most material issues while also providing transparency across a broad range of ESG topics.