Data privacy and security an emerging ESG issue for healthcare, says Medtronic at IR Magazine Forum – Healthcare
‘Healthcare as an industry has really close ties to ESG in a number of different ways,’ said Ryan Weispfenning, vice president and head of investor relations at the world’s largest medical device maker Medtronic.
Speaking at the IR Magazine Forum – Healthcare today, Weispfenning said that by nature, the healthcare sector is close to a lot of the principles of ESG. ‘We’re creating innovative products to improve people’s health and providing access to that around the world. That is pretty well aligned to what ESG stands for,’ he told Steven Wade, IR Magazine’s head of event content.
Broadly across the industry, he noted that issues around innovation and access are important. ‘Things like patient safety and product quality matter a lot – those are pretty material to healthcare companies. Making sure that what we do is safe, that we’re testing these things in a rigorous way before we give them to humans and that we have ongoing monitoring to make sure that if [issues do] pop up when these products are in use, that we can spot those things quickly and take action quickly,’ are all material to firms operating in healthcare.
The forum is the second in a series of virtual, sector-specific conferences taking place over the coming year. Already this week there was an event focused on IR in the technology, media and telecoms sector, while future events will cover financials & real estate, industrials, energy, extractives & utilities, and consumer goods.
Areas like affordability and fair pricing are also issues that healthcare as a whole is facing, he added. ‘We’re creating really innovative products but sometimes the pricing can get in the way of access to those products in certain markets. How do you how do you balance those trade-offs?’
For the E in ESG, Weispfenning said ‘product stewardship’ is the broad term used by the industry ‘to think about how much waste [we are] creating,’ for example when a medical device is shipped it’s usually in some sterile container, with additional packaging. He added that this is something healthcare companies are actively thinking about: ‘How can we reduce that packaging and still provide a very safe product?’
On the social side, an area of increasing focus across businesses broadly but healthcare specifically is ‘making sure that we attract the best and brightest workforce to our companies,’ said Weispfenning. ‘Inclusion, diversity and equity are really important topics at Medtronic,’ he explained.
For Medtronic, which produces everything from devices for the heart, bones and brains to robots that aid surgery, a growing area of ESG focus is data privacy.
Weispfenning said device security – essentially cyber security – and how that can impact medical devices was an emerging area for the firm. ‘That is an ESG topic that comes up quite a bit and that’s related to things like data privacy and security – so patients that have these products feel not only that they are secure but also that there is an expectation of privacy around the data that these devices are creating.’ It is an issue that feeds into ethics as well as sales and marketing, he added, including questions as to how distributors are conducting themselves on behalf of the company.
The all-stakeholder approach
Weispfenning also talked about the Medtronic approach to ESG materiality: the firm has been producing a materiality report for the past decade or so – something he said involves going out and interviewing a range of stakeholders.
‘I was interviewed, other key leaders were interviewed – we interviewed some of our investors, we interviewed our customers, there were government stakeholders too – so it was pretty broad,’ he explained.
What exactly does Medtronic ask when surveying these stakeholders? The firm asks what people know about Medtronic and big-picture questions such as what things are most important to them and where the company should be focused.
‘When you do [a survey like this] it really starts to hone where you should focus,’ said Weispfenning, adding that the feedback from the latest interview series has seen the company put a spotlight on three areas: innovation and access; patient safety and product quality; and inclusion, diversity and equity. These are the areas ‘where we really think we can make a difference and we’ve aligned our ESG goals to those and set public commitments to achieve them.’
To find out more about the IR Magazine Forum – Healthcare or access a replay of the event, please click here.