RESEARCH & INVESTMENT
FRAMEWORKS IN ACTION
Checking the pulse on US health care services
What are the material environmental, social and governance (ESG) risks and opportunities that our investment professionals are mindful of in the US health care services sector?
Zeroing in on what matters
Our health care services analysts created a US focused framework using their extensive global-sector experience, our proprietary research, issues identified by the International Sustainability Standards Board (ISSB), and engagement with companies and issuers.
Cheryl Frank, Capital Group portfolio manager and analyst, shares her perspective on the key issues that create and destroy value in the US health care sector.
Once our analysts had compiled a comprehensive list of ESG considerations, they determined the areas they believed were most material: consumer well-being and corporate governance.
Our US health care services ESG framework
Environmental
Climate change risk
Natural resource management
Pollution & waste management
Environmental opportunities
Social
Human capital management
Consumer well-being
Social opportunities
Governance
Corporate governance
Corporate behaviour
Consumer well-being
Our analysts concluded there are three critical issues when considering consumer well-being: safety, access and privacy.
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Consumer safety
Consumer safety
Relevance:
Patients place enormous trust in health care providers. Patient welfare must be the priority. Long-term competitive success depends on patients who get — and stay — healthy.
Best practices:
Commitment by management to prioritise patient outcomes
Quality that is measured by keeping patients healthy
Multi-year improvement goals that aim to exceed regulatory standards
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Affordability and access
Affordability and access
Relevance:
Quality health care must be affordable and accessible; failure in this effort may lead to regulatory intervention.
Best practices:
A focus on value-based health care that aims to deliver better outcomes
Price transparency and innovations supporting affordable care
Proactive partnership with government programmes
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Privacy and data security
Privacy and data security
Relevance:
Patient data enables better care, but is a vulnerability and must be secure.
Best practices:
Adherence to EU-US Privacy Shield Framework
Disclosure and rapid response to security breaches
Proactive use of data to improve patient outcomes
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Corporate governance
Our analysts prioritised three key governance issues: ethics, integrity and accountability.
Management quality, ethics and accountability
Relevance:
Management teams with steadfast integrity are essential to long-term success. Management ethics are a key lens through which to understand other ESG issues.
Best practices:
Management incentives linked to patient outcomes
Commitment to regulatory compliance in letter and spirit
Culture anchored in community service and social well-being
ESG fueled by the power of 3
Our integration approach enhances our research by incorporating material ESG risks and opportunities. Through our monitoring process, as well as engagement and proxy, our analysts continuously gather and incorporate new information.
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ESG at Capital Group
ESG AT CAPITAL GROUP
Your gateway to all things ESG at Capital Group.
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Global citizenship
GLOBAL CITIZENSHIP
We live the same high standards we expect of the organisations in which we invest.
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