What is the real meaning of implementing social impact in the healthcare sector, an already people-oriented and meaningful-vision-industry?

The following is an excerpt from an in-depth article we have written for Azapharm blog.

What is social impact?

Social impact can be defined as a significant, positive change that addresses a pressing social challenge. Creating social impact is the result of a deliberate set of activities with a goal matching this definition.

Among the Sustainable Development Goals adopted by all United Nations Member States in 2015, a blueprint to achieve a better and more sustainable future for all, we can find the goal #3

“ensure healthy lives and promote well-being at all ages”.

This goal is naturally embedded in the DNA of the healthcare industry, which has improved the health of millions of people, increasing life expectancy, eradicating a wide range of diseases and addressing many different emerging health issues.

Yet, the healthcare industry is still a commercial one, and as such it must always balance profitability and sustainability. While for some, maintaining this balance might seem a little tricky at time, we firmly believe that managing and measuring social impact contribution to the Sustainable Development Goals is not only compatible with earning long term returns, but has become essential to it. Doing good and doing well go hand-in-hand, we can no longer imagine a sustainable future and see companies prosper long-term financially if social challenges are not addressed.

Social impact and return on investment

In a globally connected world, people want to invest in, and work for companies that are making a positive contribution to addressing the world’s social and environmental challenges. More and more people look for meaning in how they make their living, they choose professions and workplaces by their values and the human asset in them.

Social impact is therefore not just a trend. Today, the market of social impact is estimated to be worth $715bn, according to the Global Impact Investing Network, a non-profit group.

Pharmaceutical companies and the large healthcare industry have shown over the years their potential to radically and positively impact society. The reason they exist and their accomplishments seem in sync with the social impact spirit.

What's the meaning of social impact in an industry like healthcare?

In an industry that increases life expectancy, eradicates and/or eliminate diseases, employs millions of people and boosts the global economy, this leaves us with a big question mark: in the healthcare sector, doesn’t the implementation of this concept of social impact seem redundant? In other words, isn’t it already ingrained in these companies’ DNA? What is its real meaning in an industry that thrives to impact the quality of life and the lives of billions of people all around the world?

We cannot ignore the fact that at times the race for profit has gotten in the way of the do no harm principle. Some corporate players have hidden behind the veil of groundbreaking scientific discoveries to prioritize profits.

Is the balance between impactful medical innovation and return on investment impossible to reach?

While the situation may present more perils than opportunities, social impact enables the creation of the missing framework to implement a sustainable change.

Investing in companies that have integrated social impact into their missions and operational activities doesn’t mean sacrificing on solid returns. On the contrary, the number of companies that do good and still have a significant return on investment is increasing.

The data on such companies is widely used today by investors to make an informed choice. Factors that cause companies to receive low ESG scores (environmental, social, and governance data), information about companies’ carbon footprints, labor policies, board makeup, and so forth are considered as they will potentially result in weak financial results.

A Message of hope

Social impact is not just a Utopian vision. It can be achieved in any sector. Implementing it in the healthcare sector is not irrelevant or redundant. If anything, it is even more important because it is so ingrained in the DNA of life science and healthcare companies. A consequent mindset shift is necessary and essential to deliver social, sustainable and profitable change, but it can be balanced with profit. There is room for innovation, not only in the healthcare services and products, but also in the business models and communication strategies of these companies.

You can read the full article and references on our blog here.