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Over the past several years, ESG has transformed from a buzz term to an important framework for healthcare organizations to implement. That's why Modern Healthcare, the industry’s leading business magazine hosted its second annual ESG summit for healthcare leaders last June.

One reason is because in evaluating the financial health of organizations, regulators — such as ratings agencies and the U.S. Securities and Exchange Commission -- are taking ESG metrics into consideration.

Another reason is many of the healthcare real estate investment trusts (REITs) that provide funding for capital projects want to invest in healthcare and senior living organizations that have strong ESG policies. They are looking for healthcare and senior living organizations that have a history of aligning their operations to support programs that benefit not only the environment but also their employees, local communities, and shareholders.

It's also the right thing to do.

Profits With a Purpose

Some in the financial world are not convinced that you can make profits with a purpose. Recently there's been a lot less interest in investing in ESG funds. But that's different than investing in companies that have strong ESG policies.

Recently, the Wall St. Journal reported that due to investor backlash, political pressure, and legal threats, many business leaders are now making a conscious effort not to use the term. And yet, many companies still have ESG programs. They just don't call it that.

The Wall St. Journal article also points out that, "some dimensions of ESG, particularly the social goals, can be difficult to quantify." It may not be as hard for healthcare organizations, though, since many already have a social mission.

What Does ESG Mean for Healthcare & Senior Living Design?

While what it's called may change, I think ESG is a trend that's here to stay for those who own and operate hospitals, clinics, residential care facilities, and senior living communities.

And there’s no doubt that the buildings that many of you design, build, equip, and furnish can help meet ESG goals and make investors happy. Let me break it down:

Environment is about creating healthy buildings -- ones that do not harm people or the planet. These are buildings that incorporate sustainable design, energy-efficient design, and wellness design.

Social is the idea that facility design and construction can affect social determinants of health, such as climate health inequities, access to care, and access to nutritional foods and physical activity. This means designing for resiliency, equality, neurodiversity, accessibility, and wellness.

Governance is about investing in healthy buildings and providing funding, direction, and guidance at the leadership level.

If you’re not already paying attention to this, you should be.

Want to Know More?

Check out these articles:

Getting to the "S" and "G" in ESG, Gensler blog post.

What Does ESG Stand For? Fast Company.

ESG: Healthcare's New Imperative, Modern Healthcare.

Making the Case for Health Buildings, my blog post.

The Connection Between Healthcare Design and the Social Determinants of Health, my blog post.

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Joseph, G. Sprague FAIA

1 month ago

Excellent message, Sara! E.S.G. is vital in all kinds of health facilities as we all know. It should drive the aspect of every Architects design as a priority! Thanks for your blogs, and I enjoyed them frequently. Best, Joe.

Sara Marberry_013-Retouched-New copy

What's my story? I'm a healthcare and senior living design knowledge expert who writes and speaks frequently about trends and issues affecting these two industries. I'm also a strategic marketing consultant and content creator, working with companies and organizations who want to improve the quality of healthcare and senior living through the design of the physical environment. You can reach me at sara@saramarberry.com.

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