With the advancement of technology, economy, and society, aging and longevity have become important characteristics of China’s population. As the centenarian era approaches, how do we build a healthier and more sustainable society?
Achieving progress in social security and enhancing people’s living standards requires governmental efforts, as well as the support of enterprises in fields such as livelihood, health, and medical care. By expanding and strategically developing their businesses, enterprises can educate consumers and gradually promote the fulfillment of social responsibility and the release of social value. Ultimately, such investments will demonstrate the long-term value of the enterprise and gain feedback from the market.
With the establishment of global energy-saving and emission-reduction strategies, changes in China's population structure, and the setting of carbon peak targets, ESG evaluation has become an important way tomeasure the sustainable development capabilities of listed companies in the capital market and investment field. In addition to traditional indicators such as revenue, profit, and efficiency, the investment and progress of enterprises in ESG have become a topic of increasing market influence.
As a medical and health enterprise with extensive payer resources, diversified supplier networks, and a robust service system, Ping An Healthcare and Technology Company Limited (“Ping An Health” or “the Company”; Stock Code: 1833.HK) has been deeply committed to the development of a healthy society, becoming a leader in China's ESG strategic plan and the wider Ping An medical and health ecosystem.
Ping An Health, as a medical and health business, leverages its technological advantages to promote employee and consumer growth and improve corporate governance efficiency. With its strong ecological empowerment capabilities, the Company enhances the anti-risk ability of the supply chain and wider industry. This ultimately helps achieve carbon neutrality and promotes the development of an ecosystem in the medical health sector which, in turn, results in better sustainable development outcomes among enterprises and society.
As of late, Ping An Health's ESG performance has once again been recognized by authoritative international organizations. In the latest ESG rating by MSCI, Ping An Health received an A rating, placing it among the top performers in the healthcare services industry. This recognition proves that companies that prioritize ESG empowerment and long-term social value enhancement will eventually receive positive feedback from the market.
Enhancing internal capabilities and strengthening corporate governance
The construction and progress of ESG is closely linked to corporate management, making it an inherent part of the industry. Meanwhile, as industry standards continue to evolve, ESG offers more dimensions of which the quality of a company’s operations can be evaluated. As a result, prioritizing ESG internal governance and integrating ESG strategies into the management of an enterprise’s entire life cycle is becoming increasingly important.
Many investment banks and financial institutions have begun to set up ESG teams and departments. For example, both Morgan Stanley and JPMorgan are developing ESG analyst teams. Boston Consulting Group (BCG), a leading international management consulting firm, recently announced the establishment of the Center for Climate & Sustainability Policy & Regulation. McKinsey also has a dedicated ESG analyst team and sustainable development department.
As ESG continues to gain importance across industries and international organizations, Ping An Health is committed to strengthening its internal ESG management framework. By leveraging the Company's internal capabilities, Ping An Health continues to actively promote the holistic development of its management system. In 2022, Ping An Health established a Sustainable Development Executive Committee to actively prepare for the optimization of its ESG governance structure. In 2023, the Sustainable Development Committee will be established.
With strong support from the management, Ping An Health optimized its three-level ESG governance structure, which covers the decision-making level, the management level, and the executive level. The Company also clarified relevant work functions at each level to ensure that all ESG tasks are under unified leadership, decision-making, and implementation.
This management structure features two main highlights. First, the Sustainable Development Committee is composed of members with high-ranking positions, including Fang Weihao, Chairman, CEO and Executive Director of Ping An Health. This arrangement maximizes the accessibility of ESG matters by shortening the decision-making process and improving efficiency.
The second notable feature is the clear definition of responsibilities at all levels, ensuring the continuous advancement of multiple ESG goals. The ESG governance framework is well-defined, with Ping An Health's management team leading and guiding the ESG management work, implementing various management measures, and reporting to the Board of Directors on a regular basis. After review and confirmation by the Board of Directors, this process serves as the basis for optimizing the annual ESG development strategy and preparing ESG reports. At the executive level, there is a clear division of tasks. The Executive Committee and specialized teams collaborate to formulate management policies and strategies, define job responsibilities, and identify risks. Each specialized unit carries out specific operational tasks, such as regular data collection.
Internally, Ping An Health’s ESG governance structure has strengthened internal governance standards, and is capable of better protecting the rights and interests of stakeholders. Improvement in information technology has also boosted efficiency. In 2022, Ping An Health’s risk management training covered 100% of employees. Out of the 379 feedback questionnaires collected regarding corporate culture and training activities, 87% of employees believe that cultural advocacy is promoted often in daily work and meetings.
Based on the ESG framework, Ping An Health has established a comprehensive supplier management system that covers the entire procurement process, including supplier qualification, service quality review, on-site inspection visits, and risk control. This system clearly showcases Ping An Health's ESG achievements to society and effectively safeguards the rights of its users.
In October 2022, Ping An Health implemented a medication risk control project that covers approximately 120,000 drugs across 25 categories. The project targets high-alert drugs, psychiatric drugs, and antimicrobial drugs to enhance patient medication safety, reduce manual costs associated with identifying risks during prescription, and avoid potential doctor-patient conflicts and disputes.
Empowering technological innovation to better protect consumer rights
Leveraging its strong technological attributes, Ping An Health has continuously been able to invest in technology and digitization to improve efficiency, enhance product quality, and better serve consumers. Notably, Ping An Health is making significant progress in protecting data security and user privacy by establishing and optimizing its information security management system. This system better protects consumer rights and creates more long-term social value.
In the realm of medical and health services, as a platform serving a vast number of individuals and enterprises, Ping An Health places a high premium on data security and consumer privacy. Protecting the sensitive nature of personal health information and data is of utmost importance, as is the commitment to safeguarding employees' personal information in corporate services. This demands the development of a comprehensive and meticulous system bolstered by a continuous optimization of service levels to ensure that privacy is respected.
In accordance with the nature of the industry, Ping An Health has been consistently improving its ability to protect information and privacy security. The Company has made significant progress in strengthening its information security infrastructure and remains committed to ongoing improvements in this area. Ping An Health formulated the "The Information Security and Data Security Management Policy Statement" to improve its information and data security management systems. As of 2022, Ping An Health has gained ISO/IEC 27001 information security management system certification, the Ministry of Industry and TLC data security management capability certification of Ministry of Industry and Information Technology, and many other information security certifications. In terms of compliance, 100% of Ping An Health's businesses have met information/privacy security management certification requirements.
Ping An Health places great importance on the standardization of systems to ensure efficient, high-quality health management service delivery to customers. Ping An Health has also strengthened standardized training in corporate management and other practices to effectively protect consumers' rights and interests. In 2022, Ping An Health conducted multiple safety trainings for each position while seamlessly integrating offline training with online live streaming. For example, on 18 October 2022, the Data Security and R&D Management Department provided offline, on-the-job Full Life Cycle Data safety training for employees in the technology department, with 350 attending in total.
Ping An Health has taken a holistic approach to business development, carefully laying out comprehensive plans for every step of operations. For instance, in compliance with marketing regulations, the Company provided responsible marketing training to all employees in 2022, with sales personnel receiving 100% coverage. On average, each sales employee received approximately 39 hours of responsible marketing training.
In the world of healthcare and medicine, information and knowledge gaps typically exist between parties involved, which can result in doctor-patient conflicts. By leveraging industry expertise and technological capabilities, Ping An Health is able to provide consumers with sustainable education, with the aim of helping consumers understand the environmental and health impacts of the products and services they choose. This will ultimately guide them towards rational, healthy, and responsible consumption. In addition to helping consumers choose the most suitable products and services for their situation, this also ensures the efficiency and quality of services through technological improvements, which will strengthen the sustainability of the existing industry ecosystem and lead to positive social developments.
Ping An Health utilizes leading artificial intelligence solutions and other advanced technologies to effectively bring protection and better services to consumers. In August 2022, Ping An Health established a special medical auxiliary diagnosis project team, which can perform tasks such as assisting doctors in conducting diagnosis, collecting necessary medical history and condition information, and generating structured electronic medical records. These measures help ensure the safety of medical diagnosis and treatment and better protect the rights and interests of consumers.
Advancing the healthcare ecosystem through commitment to core business
As an important platform within the Ping An's medical and healthcare ecosystem, Ping An Health's effort in promoting social health management and improving medical standards have reinforced its advantages in deepening social value. Ping An Health's vast user base and scale provide it with strong inclusive medical capabilities, giving it a unique advantage in promoting innovation within the healthcare industry and driving high-quality, efficient development of the overall healthcare ecosystem.
Ping An Health's online consultation services empower users to access medical consultations from the comfort of their own homes. This saves users time and effort, reduces the burden on physical hospitals, and minimizes greenhouse gas emissions from transportation. These services provide value to users, supply chains, and society, while also promoting the green upgrading of the healthcare industry and unlocking environmental value.
In terms of improving national health management standards, Ping An Health actively participates in community medical care and medical science popularization activities. In 2022, the Company closely cooperated with the Shanghai Children's Health Foundation to run a youth health protection campaign. In November, Ping An Health, together with the China Social Assistance Foundation and Pfizer, signed a memorandum of strategic cooperation on supporting comprehensive care for hemophiliac patients with the "precise assistance and return to society" strategy.
Another valuable aspect of inclusive medical care is its ability to promote inclusivity in medical services, making healthcare and medical services accessible to audiences in different regions and at different levels. Ping An Health's latest financial report reveals that the company is actively expanding its enterprise health management services, with a focus on penetrating the market of small and medium-sized enterprises and expanding its reach from first-tier to second- and third-tier cities. Throughout this process, the value of inclusive medical services for underserved populations and the promotion of the upgrade of the healthcare ecosystem has been increasingly evident.
Ping An Health has become a proactive advocate of healthy living by leveraging the vast and high-quality resources available on its platform. The Company has collaborated with various healthcare organizations, such as the Shenzhen Hospital of Southern Medical University, the Shenzhen Community Health Association, and the China Social Assistance Foundation. Furthermore, Ping An Health has pursued comprehensive strategic partnerships with internet healthcare platforms, such as Mint Health, covering health products, nutritional consulting, and health management. As an excellent representative of the corporate community, Ping An Health is continuously promoting the realization of the "Healthy China 2030" goal.
In addition to medical services, Ping An Health's expansion into the health service industry demonstrates the Company's long-term dedication to improving the overall health of the population. The latest financial report for 2022 shows that the revenue of Ping An’s health and medical service sector was RMB 2.547 billion, while the revenue of the health service sector reached RMB 3.613 billion. The health service sector saw a 13.0% quarter-on-quarter increase in the second half of last year.
Ping An Health has strategically planned and developed its internal governance, utilized technology to empower consumers' rights and interests, and leveraged industry resources to promote the upgrading of the medical and healthcare ecosystem. As a result of these efforts, the Company has successfully upgraded and released its ESG value. As a healthcare enterprise that significantly impacts people's lives, Ping An Health will continue to create market, industry, and social value based on its leading business expertise, platform scale, and operational capabilities. Going forward, the Company remains committed to generating even greater value through continued long-term planning.
