Hospitals must cut excessive medical demand for effective ESG management: expert

With the World Health Organization (WHO) declaring that "climate issues are healthcare issues," hospitals worldwide are under increasing pressure to integrate ESG (Environmental, Social, and Governance) management into their operations. A recent analysis suggests that reducing excessive medical demand is a key step in this transition.

Professor Kim Kwang-jum of the Graduate School of Healthcare Management at The Catholic University of Korea recently emphasized this point in his report, "ESG Management in the Healthcare Sector," published on Monday as part of the Korea Health Industry Development Institute’s Biohealth Focus 2025 series. The report highlights decarbonization as the most critical aspect of ESG management.

The healthcare sector is a major contributor to global carbon emissions, accounting for approximately 4.4 percent of the world’s total. Hospitals, which provide care for patients affected by climate change-related health issues, paradoxically contribute to the worsening of environmental conditions, thereby creating a vicious cycle of increasing emissions.

“The primary reason WHO considers climate issues as healthcare issues is that climate-induced risks significantly threaten human health, which makes them an urgent concern for the healthcare sector,” Professor Kim said. “However, while the healthcare sector is responsible for addressing these risks, it also contributes substantially to environmental harm through its operations.”

As such, healthcare institutions must tackle both the problems caused by climate change and its role in exacerbating environmental damage, Kim added.

ESG management in Korea’s healthcare sector

For globally operating corporations in Korea, ESG compliance is already mandatory. Listed companies will soon be required to report their ESG performance. Just as companies disclose financial risks and performance through financial statements, they must now report on environmental protection and stakeholder rights through appropriate governance structures.

Many corporations follow ESG reporting guidelines set by expert organizations or government agencies. However, when it comes to carbon emissions, businesses primarily report direct emissions from operations and indirect emissions from energy consumption, while struggling to assess emissions from their entire value chain.

In the biohealth industry, companies subject to ESG regulations have begun publishing ESG reports.

Despite these regulations, hospitals remain largely exempt.

“While some hospitals have formed ESG committees and undertaken limited initiatives, comprehensive adoption is lacking,” Kim said. “Samsung Medical Center and Korea University Medical Center are the only two hospitals in Korea that have formally published ESG reports.”

Korea lacks hospital-specific ESG reporting guidelines and dedicated institutions to oversee these efforts.

As a result, healthcare providers must rely on corporate-oriented guidelines, which do not fully address the unique challenges of the medical sector, Kim added. 

Global trends in ESG healthcare management

A key development in healthcare ESG, as outlined in the report, is that the report outlines is the emergence of the "Planetary Care Framework," which underscores that healthcare activities must align with global environmental sustainability efforts.

“The Planetary Care Framework emphasizes the suppression of excessive medical demand, the provision of adequate healthcare services, and the reduction of carbon emissions in medical service delivery,” Kim said. “While many developing countries still lack essential healthcare services, advanced nations contribute disproportionately to global carbon emissions through excessive and unnecessary medical procedures.”

Addressing this imbalance is a priority in ESG healthcare management, he added.

Regulating medical service consumption and optimizing supply requires changes in policies that influence the behavior of healthcare providers and patients. Also, reducing carbon emissions in medical procedures requires progress in sustainability science., a field dedicated to developing environmentally friendly practices within healthcare.

The role of emission research

Kim also stressed that a crucial first step in ESG healthcare management is emission research, which involves accurately measuring carbon emissions from healthcare activities.

“This research helps determine the necessary changes in medical service delivery,” he said. “Ongoing studies are examining how anesthetic gas selection, surgical materials, and procedural techniques influence carbon emissions.”

For emission research to be effective, comprehensive data on the lifecycle emissions of medical materials—including production, usage, and disposal—must be compiled, he added.

Kim emphasized that this is crucial, as a major issue in healthcare sustainability is the widespread use of disposable medical items, driven by infection control concerns.

“This practice generates large volumes of hazardous waste,” he said. “The healthcare industry must adopt a circular economy model as well as adjustments in manufacturing, hospital procurement, and insurance reimbursement policies.”

In Korea, the Ministry of Environment oversees climate issues, while the Ministry of Health and Welfare handles healthcare policy.

“However, recognizing that climate issues are healthcare issues necessitates strong cooperation between these two ministries,” Kim said. "Curbing excessive medical service provision is even more important than reducing carbon emissions in healthcare."

Establishing regulatory mechanisms to prevent the overconsumption and overproduction of healthcare services is critical, he added.

Kim stressed that while 2024 in Korea was marked by discussions on increasing essential medical services, 2025 should focus on reducing medically unnecessary or even harmful treatments.