A joint survey by Bain & Company and Asia Pacific Medical Technology Association (APACMed) reveals the growing emphasis on Environmental, Social, and Governance (ESG) initiatives by medtech companies and their clientele in the Asia Pacific region.
The survey which was completed in May this year included 120 customers and over 800 employees and executives from medtech companies across six Asia Pacific markets. The aim is to better understand how the changing expectations of stakeholders are reinforcing the importance of ESG as a strategic priority for the medtech industry.
Highlights of the survey:
- Over According to survey, over 70% of medtech customers across the countries indicate that their organizations have already defined ESG strategies including adopting ambitious objectives, precise metrics, and quantifiable targets.
- Over 70% of medtech customers in Australia, China, India, Japan, South Korea, and Vietnam stated that their organizations had already formulated ESG strategies, encompassing the adoption of ambitious objectives, precise metrics, and quantifiable targets.
- In contrast, 60% of medtech employees indicated that their companies had defined ESG aspirations and established specific targets.
- Over the next two years, 53% of surveyed customers in the region anticipate an increased importance of ESG criteria in their organization’s supplier selection, with 69% expecting further escalation over the next five years.
- Australia and China are spearheading this movement, with 85% and 60% of customer respondents, respectively, predicting that their organizations will prioritize ESG factors in their key purchasing criteria within two years. More than 90% of surveyed customers in the two markets possess well-defined ESG strategies.
- Australia stands out as a leader in ESG maturity, having implemented comprehensive regulations and a wide range of policies related to environmental matters at both state and national levels.
- Countries such as China, Japan, and South Korea have made significant progress in environmental policies over the past five years, emphasizing the reduction of energy intensity and the pursuit of carbon neutrality. Circularity initiatives around sustainable material use and waste management are gaining traction with increased adoption expected in the years ahead.
- On the other hand, countries such as India and Vietnam remain in the nascent stages of environmental development. These markets are currently creating more environment- specific rules, including those designed to address the unique needs of the medtech sector.
- Interestingly, employees in developing markets perceive environmental issues as more critical than their counterparts in developed markets. Over 90% of surveyed employees in India and Vietnam consider environmental factors important in their daily lives and their companies’ operations. Furthermore, about 78% of surveyed employees in these two markets agree that environmental stewardship is a crucial driver for attracting talent.
- This is consistent with the Asia Pacific average where three-quarters of surveyed Asia-Pacific medtech employees consider environmental impact an important criterion when selecting employers.
- Still, medtech firms in Asia Pacific have demonstrated their commitment to contribute to ESG targets and foster sustainable development.
- Medtech companies have launched numerous initiatives including energy-efficient manufacturing, supply chain engagement, recycling, waste reduction, remanufacturing, and eco-material adoption. They also continue to focus on improving healthcare access, community engagement, diversity, and inclusion.
Further acknowledging the importance of ethical business practices and transparency, medtech companies in the Asia-Pacific region have restructured their standard operating procedures and offered supplementary compliance training for employees.
