As the economy and technology continue to advance, the need for health and sustainable development is becoming increasingly apparent. There is a growing consensus that enterprises should leverage their power and fulfill their social responsibility to jointly promote the realization of long-term economic and social values. As such, ESG evaluation has become an important way to measure the contribution of enterprises to the sustainable development of society.
As the concept of sustainable development continues to gain momentum, stakeholders from various industries and fields are collaborating to gradually improve ESG-related policies, methodologies, and data to jointly implement ESG and sustainable development in China. According to the "dual carbon" policy, listed companies have regarded the annual ESG report as an important channel to promote corporate values and demonstrate their plans for sustainable development. More companies are integrating ESG and sustainability concepts into their strategies and operations, which is reflected in some companies’ recently-published ESG reports.
In this issue, we take Ping An Health Medical Technology Company Limited ("Ping An Good Doctor" or "Ping An Health", stock code: 1833.HK) as an example to see what companies in the healthcare sector can learn from their experience in the context of the dual carbon goal.
Anchoring the healthcare field with people-oriented approach to promote corporate and social sustainability
The Chinese economy's shift towards high-quality development is a defining characteristic of the new era. The only way true sustainability can be achieved is through high-quality development, which can be clearly observed in the way Ping An Health’s development journey.
In 2021, Ping An Health launched the strategic 2.0 upgrade plan, and proposed a unique business model of "managed care + family doctor membership + O2O healthcare services" under Ping An Group's two-wheel drive strategy of "integrated finance + medical and health". During the 2022 fiscal year, Ping An Health reached RMB6.16 billion in total revenue and narrowed losses by more than 60% year-over-year after the strategic upgrade, validating the effectiveness of the new strategic direction.
“As a key component of China's signature managed care, Ping An Health brings together both payers and providers to deliver a people-oriented healthcare solution which is worry-free, time-saving, and money-saving,” said Fang Weihao, Chairman and CEO of Ping An Health. “With 227 million personal financial customers from the Group, Ping An Health can adopt a unified procurement standard to provide cost-effective medical and elderly care services. Ping An Health can solve a major challenge in the medical industry by enabling face-to-face communication between users and doctors through its online, in-store, and at-home service network. This will improve the medical experience and promote industry optimization and upgrading.”
In addition to boosting the quality and efficiency of industry services, Ping An Health is also promoting health management among corporate employees and helping them to improve their health. For an enterprise to be competitive, it needs to attract and retain talented people.
Ping An Health's white paper titled "2022 Building a Happy Workplace: A Guide to Workplace Health Promotion and Action" reveals the success of its "Enterprise EZhealth" 2+4 corporate health management product system. This system offers comprehensive health management solutions through "Health Checkup+" and "Health Management+" and proposes an innovative approach of providing employees with dedicated healthcare doctors.
By providing a one-stop health management solution through "Health Checkup+" and "Health Management+", Ping An Health has pioneered the idea of equipping employees with a dedicated health care practitioner and linking the diversified services to meet the different health management needs of employees in terms of daily health, sub-health, diseases, and chronic diseases. This helps enterprises manage their employee’s health properly. By the end of 2022, the number of corporate customers reached 978, covering about 3 million employees and customers.
Technology and innovation empowerment protects consumers' rights
As a medical and healthcare enterprise, technological innovation drives the upgrade of service quality and the improvement of consumer rights protection. As a medical and healthcare enterprise, Ping An Health leverages technological innovation to enhance service quality and ensure consumer rights protection. In August of last year, Ping An Health set up a special medical paramedical project team to focus on the safety of medical treatment.
The paramedical platform project upgrade facilitates medical consultations, enables doctors to gather essential medical history and condition information, and generates structured electronic medical records. This approach maximizes the safety of medical treatments and provides greater protection for consumers' rights. Ping An Health has also set up an "abnormal event management system", through which internal medical personnel can proactively report problems after discovering them, either with their real names or anonymously, and forward them to the relevant responsible departments for processing. This effectively realizes systematic and process-oriented management of medical quality defects, which helps avoid and prevent various potential risks and hazards.
Ping An Health has developed an AI-assisted diagnosis and treatment system that leverages industry-leading intelligent medical technology and the AskBob artificial intelligence algorithm. The system includes four major sections: intelligent critical care monitoring, AI-assisted consultation, rational drug use monitoring, and intelligent medical safety monitoring.
At present, the AI-assisted diagnosis system covers the diagnostic knowledge of over 2,000 diseases, boasting a diagnostic accuracy of over 99% and a complementary diagnosis accuracy of over 95%. By providing doctors with additional knowledge and efficiency, this system empowers them to deliver high-quality medical services while also improving the efficiency of collecting patient information before consultation.
In the healthcare industry, consumer privacy protection is a major public concern. As of 2022, Ping An Health has obtained several information security certifications, including ISO/IEC 27001 Information Security Management System Certification and TLC Data Security Management Capability Certification by the Ministry of Industry and Information Technology. In terms of compliance, Ping An Health has achieved a 100% information/privacy security management certification rate for its operations. On 25 May this year, Ping An Health also received DNV ISO 27799 certification for its personal medical and health information security management system. Ping An Health is the first company in the internet medical field to receive this certification from DNV.
Promoting self-governance and optimization, saving energy, and reducing consumption to fulfill social responsibilities
Many enterprises choose to disclose their ESG initiatives through ESG reports. For Ping An Health, optimizing its ESG governance structure has become a top priority in 2022. Ping An Health’s financial report highlights that it has further refined its ESG management system this year, implementing a three-tier governance structure from decision-making to management to executive level. This structure clarifies the relevant work functions at each level, ensuring unified leadership, decision-making, and implementation of ESG initiatives.
In general, the new ESG management system has adopted a simplified governance structure. Ping An Health's ESG management system is designed to provide complete and comprehensive ESG workflow coverage. This includes strategy formulation for sustainable development management, work planning and specific implementation, systematic ESG risk management, and ESG report review and approval. Through monthly reporting and communication, quarterly reviews, semi-annual meetings, and annual evaluations, the Company establishes an ESG workflow coverage that aligns with its development goals. The soundness of the corporate system has also reduced the risks arising from corporate management. With well-defined system specifications, a mature organization structure, and complete technical means, Ping An Health can effectively safeguard its sustainable, stable, and healthy development.
In addition to optimizing its self-governance, Ping An Health also places considerable importance on its social responsibilities. In 2022, Ping An Health collaborated with the Shanghai Children's Foundation to launch the Youth Health Care Initiative, which aimed to educate parents of school-age students in Shanghai on the healthy growth of children through live webcasts. Additionally, Ping An signed a memorandum of understanding with the China Social Welfare Foundation and Pfizer to provide comprehensive care and precise assistance to hemophiliacs.
According to its financial report, Ping An Health is continuously establishing itself as a leader in corporate health management and is expanding its reach from large enterprises to small and medium-sized enterprises. Ping An Health is expanding its business from first-tier cities to second- and third-tier cities, demonstrating its corporate responsibility by promoting the progress of universal healthcare and the availability of medical services. By building an inclusive medical ecosystem, the Company is taking steps to ensure that quality healthcare is accessible to people in all parts of the country. As Ping An Health's ESG work continues to progress steadily, its ESG practices have been recognized by some of the most respected institutions in recent years. Ping An Health has won several ESG awards and earned an "A" rating from MSCI ESG for two consecutive years, continuing to rank among the top in the healthcare services industry.
Conclusion
In today's world of innovation and development, ESG has become a story that many companies want to share. However, it's important to understand that ESG goes beyond being just a catchy slogan. It signifies a profound change in corporate management philosophy and business behavior, where knowledge and action are integrated. As corporate management objectives and ESG principles become more closely aligned, the significance of ESG in ensuring long-term enterprise development is increasingly acknowledged.
From the corporate perspective, practicing ESG can better consider the interests of employees, consumers, and the wider social ecosystem. From the perspective of corporate governance, companies that are better at formulating long-term development plans are more likely to achieve long-term profitability. In an increasingly competitive healthcare industry, Ping An Health's early ESG planning has struck a balance between long-term business interests and ESG values. This approach has set a positive example for the industry by demonstrating how companies can use technology to strengthen internal corporate governance, protect consumer rights, and contribute to industry development. Although building a proper ESG framework is a long and arduous task, companies that take the initiative to do so may end up seeing things from a different perspective.
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