Chin: Embarking on ESG initiatives has helped the group reduce long-term costs by improving efficiency.
THE provision of private healthcare services is a resource-intensive affair, thus ensuring sustainability in this sector is key for greater environmental, social and governance (ESG) compliance.
Improving the ESG front, while it may sound tedious at first, will benefit private hospital groups in the longer run as well.
This is evident and seen among the two biggest public-listed private hospital groups in Malaysia – IHH Healthcare Bhd and KPJ Healthcare Bhd as they are starting to reap manifold gains from some of their ESG-related initiatives.
Both groups have noted of greater cost efficiencies, whether intended or not as they push forward by placing a high priority on ESG compliance amid greater regulatory requirements.
IHH, which owns some 18 hospitals in Malaysia, notes that ESG-driven initiatives can contribute to cost efficiencies in the areas of energy, waste and water management.
IHH’s group chief sustainability officer Yasemin Tecmen Stubbe shares some of these initiatives include the group’s decision to invest in energy-efficient technologies like light-emitting diode (LED) lighting, solar panels, and smart chiller systems.
“This has led to lower electricity consumption and operational expenses. In addition, sustainable procurement practices help reduce medical supply waste and optimise resource usage. While water conservation initiatives, such as recycled water systems, have further helped in reducing hospital utility bills while promoting sustainability,” Yasemin says.
Apart from this, the IHH group is also bracing for climate change impacts across its operations globally, which can cause unanticipated high one-off costs.
In December 2023, a hospital under the group, Gleneagles HealthCity Chennai, faced severe flooding and infrastructure damage following torrential rain that lasted over 20 hours, caused by Cyclone Michaung.
“Since then, we have enhanced our flood risk mitigation strategies – from erecting flood walls and removable flood barriers at key entrances to upgrading sump pump capacity for faster drainage – and were awarded the DRI International Award, validating our commitment to continuous, safe and effective healthcare services even in times of crisis,” Yasemin says.
IHH has started analysing future climate scenarios to identify physical risks such as flooding, extreme heat, extreme rainfall and water stress, all of which could potentially impact its ability to deliver care as well as its patients’ ability to access care.
“These analyses will help us develop proactive plans to respond to evolving climate conditions,” she adds.
IHH also says it recognises that investing in its own people is key for long-term sustainability.
Yasemin says the group sees improvement in staff retention rates and ultimately reducing headcount turnover by enhancing workforce training, employee well-being programmes and professional development opportunities.
“A more engaged, well-trained workforce leads to lower recruitment costs, fewer medical errors and improved patient care efficiency,” she notes.
Meanwhile, KPJ’s president and managing director Chin Keat Chyuan says embarking on ESG initiatives has helped the group reduce long-term costs by improving efficiency across its operations.
Among its initiatives on this front include deploying energy-saving measures such as LED retrofitting, solar panels and smart building systems which help reduce electricity usage.
“Also water conservation efforts, including low-flow fixtures and rainwater harvesting, helps us lower utility bills. Waste segregation at source has also reduced clinical waste volumes and disposal costs,” Chin says.
Meanwhile, KPJ’s other efforts on this front are to digitise paper-based processes, which help improve workflow and reduce administrative workload.
“At the same time, telemedicine helps reduce the need for physical infrastructure and travel, lowering carbon emissions and operational expenses.
“Artificial intelligence-driven models also support better inventory planning, avoiding unnecessary purchases and reducing waste,” Chin says.
Moving forward, Chin says KPJ would like to place greater emphasis on both environmental and social impact as part of its ESG strategy.
On the environmental front, KPJ’s focus covers expanding green-certified hospital infrastructure, enhancing energy and water efficiency; and supporting the circular economy.
“This includes the adoption of solar energy, EV charging facilities, rainwater harvesting systems and improved clinical waste segregation across our hospital network,” Chin says.
Similarly, IHH’s Yasemin says the group is accelerating the deployment of renewable energy sources across its operations globally.
“Rooftop solar systems are already installed at 10 hospitals in Malaysia and Gleneagles Hong Kong, and six additional Malaysian hospitals are scheduled for solar installation by the end of 2025. Additionally, in 2024 we signed a contract to implement a large-scale solar farm for our Turkiye operations, which is expected to be ready in 2025, covering up to 80% of its annual energy needs,” she says.
On the social front, IHH acknowledges its people are instrumental in providing quality care to its patients and it will continue to invest in this asset.
“We also continue to champion healthcare accessibility through corporate responsibility initiatives like the Life Renewed Programme, which provides free cancer treatment to under-served communities through an ongoing corporate responsibility partnership with the Health Ministry.
“Community outreach remains a key pillar, with us actively participating in disaster relief efforts, providing medical aid to flood victims, and supporting healthcare programmes for vulnerable populations,” she says.
For KPJ on the social front, Chin says the group remains committed to equitable access to healthcare.
Its initiatives on this front are through the Klinik Waqaf An-Nur and its mobile clinics which continue to play a vital role in reaching under-served communities, while it also scales up its health awareness and outreach programmes, Chin says.
“Internally, we are focused on workplace safety, employee well-being and providing equal opportunities for career development across all levels of the organisation,” he adds.
