We have limited Spanish content available. View Spanish content.

Press release

Majority of Asia Pacific medtech companies and customers have set ESG metrics, survey

Majority of Asia Pacific medtech companies and customers have set ESG metrics, survey

  • octubre 24, 2023
  • min read

Press release

Majority of Asia Pacific medtech companies and customers have set ESG metrics, survey

SINGAPORE – October 25, 2023 – Environmental, social, and governance (ESG) initiatives are increasingly prioritized by Asia Pacific medtech companies and their customers, according to a survey conducted jointly by Bain & Company and Asia Pacific Medical Technology Association (APACMed).

More than 70% of medtech customers from Australia, China, India, Japan, South Korea, and Vietnam indicated that their organizations had already defined ESG strategies including adopting ambitious objectives, precise metrics, and quantifiable targets. In comparison, 60% of medtech employees reported that their companies have established ESG ambitions and set specific targets.

The survey which was completed in May this year included 120 customers and over 800 employees and executives from medtech companies across six Asia Pacific markets. The aim is to better understand how the changing expectations of stakeholders is reinforcing the importance of ESG as a strategic priority for the medtech industry.

Rising expectations across all stakeholder groups, including policymakers, investors, customers, and employees, reinforce the importance of ESG as a strategic priority for medtech companies,” said Vikram Kapur, head of Bain’s APAC healthcare & life sciences practice, based in Singapore. “This decade promises rapid advancements in medical technology, intertwined with an intensified focus on sustainability and ethical governance. The industry can expect innovations catering to medical needs while prioritizing environmental and social concerns.”

Fifty-three percent of surveyed customers in the region anticipate that the significance of ESG criteria in their organization’s supplier selection will rise over the next two years, with 69% expecting a further increase in importance over the next five years. Australia and China are leading the way with 85% and 60% of customer respondents, respectively, predict their organizations will prioritize ESG factors in their key purchasing criteria within two years. More than 90% of surveyed customers in the two markets possess well-defined ESG strategies.

Australia stands out as a leader in ESG maturity, having implemented comprehensive regulations and a wide range of policies related to environmental matters at both state and national levels. The country’s National Reconstruction Fund supports sustainable projects in priority sectors such as medical science and devices through equity, loans, or guarantees. Similarly, countries such as China, Japan, and South Korea have made significant progress in environmental policies over the past five years, emphasizing the reduction of energy intensity and the pursuit of carbon neutrality. Circularity initiatives around sustainable material use and waste management are gaining traction with increased adoption expected in the years ahead.

On the other hand, countries such as India and Vietnam remain in the nascent stages of environmental development. These markets are currently creating more environment-specific rules, including those designed to address the unique needs of the medtech sector.

In addition to the challenges in maneuvering through the diverse and constantly evolving environmental policy landscape in Asia Pacific, medtech companies must also deal with the absence of comparable and reliable data crucial for making well-informed ESG-related investments and business decisions.

The medtech industry’s response to ESG concerns is also driven by customer requirements, which can vary across Asia-Pacific markets. Surveyed customers revealed that they still prioritize product quality and cost over environment when selecting third-party suppliers. However, the importance of environmental factors is expected to increase in the next two years, with 30% of surveyed customers ranking it as a top-three criterion when selecting medtech suppliers.

In Australia, environmental factors are increasingly influential in supplier selection for customers. For example, approximately one-third of surveyed customers in Australia ranked environmental considerations among their top three criteria for supplier selection, with 40% expecting this to be the case in two years. Among these environmental considerations, electronic waste management and product circularity are rated as the most important criteria for supplier selection. In contrast, only 18% of surveyed customers in Vietnam and South Korea rate environmental factors as one of their top three purchasing criteria.

Interestingly, employees in developing markets perceive environmental issues as more critical than their counterparts in developed markets. Over 90% of surveyed employees in India and Vietnam consider environmental factors important in their daily lives and their companies’ operations. Furthermore, about 78% of surveyed employees in these two markets agree that environmental stewardship is a crucial driver for attracting talent. This is consistent with the Asia Pacific average where three-quarters of surveyed Asia-Pacific medtech employees consider environmental impact an important criterion when selecting employers.

Still, medtech firms in Asia Pacific have demonstrated their commitment to contribute to ESG targets and foster sustainable development.

Medtech companies have launched numerous initiatives including energy-efficient manufacturing, supply chain engagement, recycling, waste reduction, remanufacturing, and eco-material adoption. They also continue to focus on improving healthcare access, community engagement, diversity, and inclusion. Further acknowledging the importance of ethical business practices and transparency, medtech companies in the Asia-Pacific region have restructured their standard operating procedures and offered supplementary compliance training for employees.

“The medtech industry in the Asia-Pacific region should play a significant role in collaborating on global ESG strategy development and shaping regional and country-specific priorities and initiatives. Successful medtech companies emphasize global sustainability while recognizing the importance of addressing local market nuances and engaging with local stakeholders,” said Harjit Gill, CEO, APACMed.

# # #

Editor's Note: For more information or interview requests please contact: Ann Lee, tel: +65 6228 2960, email: ann.lee@bain.com, Bain & Company

About Bain & Company

Bain & Company is a global consultancy that helps the world’s most ambitious change makers define the future.

Across 65 cities in 40 countries, we work alongside our clients as one team with a shared ambition to achieve extraordinary results, outperform the competition, and redefine industries. We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster, and more enduring outcomes. Our 10-year commitment to invest more than $1 billion in pro bono services brings our talent, expertise, and insight to organizations tackling today’s urgent challenges in education, racial equity, social justice, economic development, and the environment. We earned a platinum rating from EcoVadis, the leading platform for environmental, social, and ethical performance ratings for global supply chains, putting us in the top 1% of all companies. Since our founding in 1973, we have measured our success by the success of our clients, and we proudly maintain the highest level of client advocacy in the industry.