Why are some issues greyed out? Environment
- GHG Emissions
- Air Quality
- Energy Management
The category addresses environmental impacts associated with energy consumption. It addresses the company’s management of energy in manufacturing and/or for provision of products and services derived from utility providers (grid energy) not owned or controlled by the company. More specifically, it includes management of energy efficiency and intensity, energy mix, as well as grid reliance. Upstream (e.g., suppliers) and downstream (e.g., product use) energy use is not included in the scope.
- Water & Wastewater Management
- Waste & Hazardous Materials Management
The category addresses environmental issues associated with hazardous and non-hazardous waste generated by companies. It addresses a company’s management of solid wastes in manufacturing, agriculture, and other industrial processes. It covers treatment, handling, storage, disposal, and regulatory compliance. The category does not cover emissions to air or wastewater nor does it cover waste from end-of-life of products, which are addressed in separate categories.
- Ecological Impacts
Social Capital
- Human Rights & Community Relations
- Customer Privacy
- Data Security
The category addresses management of risks related to collection, retention, and use of sensitive, confidential, and/or proprietary customer or user data. It includes social issues that may arise from incidents such as data breaches in which personally identifiable information (PII) and other user or customer data may be exposed. It addresses a company’s strategy, policies, and practices related to IT infrastructure, staff training, record keeping, cooperation with law enforcement, and other mechanisms used to ensure security of customer or user data.
- Access & Affordability
The category addresses a company’s ability to ensure broad access to its products and services, specifically in the context of underserved markets and/or population groups. It includes the management of issues related to universal needs, such as the accessibility and affordability of health care, financial services, utilities, education, and telecommunications.
- Product Quality & Safety
The category addresses issues involving unintended characteristics of products sold or services provided that may create health or safety risks to end-users. It addresses a company’s ability to offer manufactured products and/or services that meet customer expectations with respect to their health and safety characteristics. It includes, but is not limited to, issues involving liability, management of recalls and market withdrawals, product testing, and chemicals/content/ingredient management in products.
- Customer Welfare
The category addresses customer welfare concerns over issues including, but not limited to, health and nutrition of foods and beverages, antibiotic use in animal production, and management of controlled substances. The category addresses the company’s ability to provide consumers with manufactured products and services that are aligned with societal expectations. It does not include issues directly related to quality and safety malfunctions of manufactured products and services, but instead addresses qualities inherent to the design and delivery of products and services where customer welfare may be in question. The scope of the category also captures companies’ ability to prevent counterfeit products.
- Selling Practices & Product Labeling
The category addresses social issues that may arise from a failure to manage the transparency, accuracy, and comprehensibility of marketing statements, advertising, and labeling of products and services. It includes, but is not limited to, advertising standards and regulations, ethical and responsible marketing practices, misleading or deceptive labeling, as well as discriminatory or predatory selling and lending practices. This may include deceptive or aggressive selling practices in which incentive structures for employees could encourage the sale of products or services that are not in the best interest of customers or clients.
Human Capital
- Labor Practices
- Employee Health & Safety
The category addresses a company’s ability to create and maintain a safe and healthy workplace environment that is free of injuries, fatalities, and illness (both chronic and acute). It is traditionally accomplished through implementing safety management plans, developing training requirements for employees and contractors, and conducting regular audits of their own practices as well as those of their subcontractors. The category further captures how companies ensure physical and mental health of workforce through technology, training, corporate culture, regulatory compliance, monitoring and testing, and personal protective equipment.
- Employee Engagement, Diversity & Inclusion
The category addresses a company’s ability to ensure that its culture and hiring and promotion practices embrace the building of a diverse and inclusive workforce that reflects the makeup of local talent pools and its customer base. It addresses the issues of discriminatory practices on the bases of race, gender, ethnicity, religion, sexual orientation, and other factors.
Business Model & Innovation
- Product Design & Lifecycle Management
- Business Model Resilience
- Supply Chain Management
- Materials Sourcing & Efficiency
- Physical Impacts of Climate Change
The category addresses the company’s ability to manage risks and opportunities associated with direct exposure of its owned or controlled assets and operations to actual or potential physical impacts of climate change. It captures environmental and social issues that may arise from operational disruptions due to physical impacts of climate change. It further captures socio-economic issues resulting from companies failing to incorporate climate change consideration in products and services sold, such as insurance policies and mortgages. The category relates to the company's ability to adapt to increased frequency and severity of extreme weather, shifting climate, sea level risk, and other expected physical impacts of climate change. Management may involve enhancing resiliency of physical assets and/or surrounding infrastructure as well as incorporation of climate change-related considerations into key business activities (e.g., mortgage and insurance underwriting, planning and development of real estate projects).
Leadership & Governance
- Business Ethics
The category addresses the company’s approach to managing risks and opportunities surrounding ethical conduct of business, including fraud, corruption, bribery and facilitation payments, fiduciary responsibilities, and other behavior that may have an ethical component. This includes sensitivity to business norms and standards as they shift over time, jurisdiction, and culture. It addresses the company’s ability to provide services that satisfy the highest professional and ethical standards of the industry, which means to avoid conflicts of interest, misrepresentation, bias, and negligence through training employees adequately and implementing policies and procedures to ensure employees provide services free from bias and error.
- Competitive Behavior
- Management of the Legal & Regulatory Environment
- Critical Incident Risk Management
- Systemic Risk Management
(Industry agnostic)
Disclosure Topics (Industry specific) for:
Health Care Delivery
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Energy Management
Energy Management
Health care delivery companies operate energy-intensive facilities and rely on both purchased electricity and fuel. The consumption of both can contribute to environmental impacts, including climate change and pollution. Legislative attempts to limit these impacts and to incentivize energy efficiency and renewable energy may result in price volatility associated with fossil fuels and conventional electricity. Companies that are able to improve energy efficiency can decrease costs and limit exposure to fluctuations in energy pricing.
Waste & Hazardous Materials Management
Waste Management
Health care delivery companies generate a significant amount of regulated medical and pharmaceutical waste. Disposal fees for these types of waste are typically higher than that of conventional waste and can present a significant cost for the industry. Companies that are able to reduce the amount of waste generated by enhanced waste segregation strategies, recycling, and reuse can limit their exposure to these costs.
Data Security
Patient Privacy & Electronic Health Records
The Health Insurance Portability and Accountability Act (HIPAA) requires health care providers to establish administrative, physical, and technical safeguards to protect the integrity, confidentiality, and availability of patient health information. Failure to comply with such regulations can lead to civil and criminal penalties. The extent and enforcement of these fines was strengthened by the American Recovery and Reinvestment Act (ARRA). The ARRA also established financial incentives for the meaningful use of electronic health records, as well as reduced Medicare payments for companies that fail to demonstrate meaningful use. Although meaningful use was supplanted by Promoting Interoperability by the Medicare Access and CHIP Reauthorization Act (MACRA), financial incentives and penalties remain tied to the effective use of electronic health records. As legislative efforts continue to promote the use of electronic health records and health care delivery companies face increasing threats related to cybersecurity, disclosure on the use of electronic health records and data security will allow shareholders to monitor performance in these areas.
Access & Affordability
Access for Low-Income Patients
The Patient Protection and Affordable Care Act (PPACA) expanded the number of insured individuals. However, more than 10 percent of the adults in the U.S. remain uninsured. Health care delivery companies will continue to face challenges associated with serving uninsured and low-income patients. These challenges are likely to be compounded by reductions in Disproportionate Share Hospital (DSH) payments. Disclosure on how companies manage the provision of care to uninsured populations and shifting DSH allocations will allow shareholders to understand the associated risks and opportunities.
Product Quality & Safety
Quality of Care & Patient Satisfaction
The ability to deliver quality care and ensure patient satisfaction is an essential value driver for health care delivery companies. The link between performance in this area and shareholder value was strengthened by the Patient Protection and Affordable Care Act (PPACA). Included in the Act’s provisions, is the establishment of the Hospital Value-Based Purchasing Program, which provides incentive payments, based on performance on a series of health care quality measures. In addition, the PPACA created programs that reduce inpatient payments for hospitals with excessive readmissions rates and hospital-acquired conditions.
Customer Welfare
Management of Controlled Substances
The Health Care Delivery industry is in a unique position with respect to the evolving opioid epidemic in the U.S. As one of the largest prescribers of opioids, the industry has contributed to an increase in the use of these substances and subsequently to a rise in addiction levels. As the providers of care, the industry also treats individuals who are suffering from addiction and related health concerns. Although health care delivery companies do not typically face direct costs associated with the prescription of opioids, they face significant costs in addressing the health care needs of those suffering from addiction and related illnesses. Industry-wide efforts to reevaluate approaches to pain management through the development of new policies, training, and oversight may have financially material impacts.
Selling Practices & Product Labeling
Pricing & Billing Transparency
In the U.S., concern over pricing and billing transparency in the Health Care Delivery industry has led to numerous legislative efforts at both the state and federal level. More than 40 states report information on charges or payment rates, and make the information available to the public. For hospitals accepting Medicare patients, the Centers for Medicare & Medicaid Services (CMS) provides average charges per patient and average Medicare payments for the 30 most common ambulatory procedures and the most frequent diagnosis-related groups. Beginning in 2019, CMS is also likely to require that hospitals publish a list of their current standard charges online, and that these charges be updated annually. This would strengthen requirements established in the Patient Protection and Affordable Care Act (PPACA), and be similar to existing requirements in numerous states. These legislative and regulatory efforts, coupled with increased emphasis on health care cost containment, may enhance scrutiny on the pricing and billing practices of companies in this industry. Firms that are able to achieve compliance and transparent pricing structures may be better positioned to protect shareholder value.
Employee Health & Safety
Employee Health & Safety
The Health Care Delivery industry is heavily dependent on a skilled workforce, and employees are routinely exposed to injury, illness, and infection during their regular duties. Relative to other industries, Health Care Delivery has one of the highest rates of injury and illness. Companies that are able to manage this issue more effectively can reduce costs associated with workers’ compensation, productivity, morale, and employee retention. Companies often mitigate risks by implementing proactive health and safety management protocols, developing training requirements for employees, and conducting regular audits of their own practices.
Employee Engagement, Diversity & Inclusion
Employee Recruitment, Development & Retention
Health care delivery companies will continue to face increased competition for physicians due to increased demand which is intensified by current and future shortages. The ongoing ability to recruit, develop, and retain health care practitioners is critical to success in this industry and disclosure on related performance indicators allows shareholders to understand how companies are managing this important human capital issue.
Physical Impacts of Climate Change
Climate Change Impacts on Human Health & Infrastructure
An increase in extreme weather events associated with climate change could present physical threats to health care delivery facilities and create challenges in serving affected populations. Coupled with the potential spread of infectious diseases, and food and water scarcity, these events may present material implications for the Health Care Delivery industry. Company disclosure on policies, practices, and preparedness relating to climate change will help investors understand how value will be protected.
Business Ethics
Fraud & Unnecessary Procedures
Health care delivery companies in the U.S. are subject to significant fines and penalties under the Federal False Claims Act and similar state laws. Entities that receive at least $5 million annually in Medicaid payments must have written policies for all employees and contractors regarding false claims, false statements, and whistleblower protections under these laws. The ability to ensure compliance in this area may have material implications for health delivery companies.
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