Mark Crawford of Pilgrim Software recently conducted a Q&A with Capaccio’s Wayne Bates regarding sustainability and the medical device industry. Pilgrim Software is a world-leading provider of Enterprise Risk, Compliance and Quality Management (ERCQM) solutions for highly regulated industries. Pilgrim has pioneered effective, integrated software solutions for the Life and Health Sciences and Consumer industries, as well as manufacturers in the automotive, aerospace and defense, and other non-regulated industries.
“Sustainability” has become a trendy, mainstream term over the past decade. However, applying the triple-bottom line aspects of sustainability—economic prosperity, social well-being, and environmental stewardship—is of growing importance to customers, employees, investors, and non-governmental organizations (i.e., stakeholders of manufacturing and institutional organizations).
Question: Wayne, how would you define sustainability?
Sustainability is the ability of an organization to transparently manage and balance its responsibilities of environmental stewardship, social well-being, and economic prosperity over the long term. People often get sidetracked by definitional disputes. However, to be sustainable, regardless of size, an organization must identify and manage the environmental, economic, and social risks and opportunities associated with its operations and products. History is rich with examples such as unsustainable societies, practices, and products. The question is: How long can something that is not sustainable last?
Why has sustainability become such a buzzword in recent years?
Well-run companies (and societies) have been operating in a sustainable manner for years because it is good business. To a large extent, marketing is the reason sustainability is such a mainstream buzz word. As a whole, societies of developed nations are holding corporations more accountable for the products they are producing, especially in the business-to-consumer markets. In turn, organizations are responding by addressing their impacts and promoting the efforts to sell goods. As the general public becomes more educated on sustainable practices, the expectations are beginning to be integrated into the business-to-business world.
Why is sustainability important to the medical device industry?
In addition to the pressure society is putting on business-to-consumer companies to be more sustainable, governmental agencies continue to revise existing regulations and pass new ones that have a direct operational impact from an economic, environmental, and social perspective. For example, the United States recently passed the Dodd-Frank Act that requires organizations to verify that its products do not contain minerals originating from the Democratic Republic of the Congo. This is having a significant impact on large and small medical device companies and their supply chains. As a result, large and small medical device companies should be prepared to confront an increasingly broad range of environmental, economic, and social issues.
What are the value drivers for sustainability in the medical device industry?
Value drivers may vary depending on the organization, but here are some examples:
- Customers—group purchasing organizations can encourage the use of eco-friendly medical products
- Suppliers—it is good business practice, and in some instances required by large organizations as a condition of doing business, to ensure that suppliers track and verify their sources
- Data management—environmental metrics can be effectively tracked and managed through environmental health and safety management systems
- Compliance with legislation—legislation, like the European directives (e.g., RoHS and WEEE), drives product stewardship and dictates what goes into a product
- Economic value—increasing cost savings and efficiency reduces risks and impacts related to costs
How can a company track and communicate performance?
There are many external ranking systems like the Global Reporting Initiative (GRI), Newsweek, and Carbon Disclosure Project (CDP) that both influence and drive sustainability performance. It can be difficult to decide what to measure and report, but organizations should consider material issues that can be managed, as well as what is important to stakeholders. It is imperative that companies seeking to track and communicate performance make a commitment to sustainability and set quantifiable, achievable goals. Management systems such as ISO 9000, ISO 14000, and OSHAS 18000 help with tracking this data from several different departments or locations. A growing number of companies are communicating their sustainability programs by preparing and publishing a Corporate Social Responsibility or Sustainability report that covers the economic, environmental, and social aspects of the organization.
How does having a sustainability program help companies manage stakeholders expectations?
As noted above, understanding value drivers helps an organization identify and manage risks, challenges, and opportunities, whereas tracking and communicating performance allows a company to transparently balance the three responsibilities. In doing so, it is important for organizations to understand and demonstrate expectations of both internal and external customers. For example, internal customers, including employees that expect to work for a socially responsible company, need to be shown how they can play a role in sustainability efforts, and be made aware that there is an ongoing commitment from the company. Ultimately, instead of viewing sustainability as “just another thing to do” it can be a tool to manage risk and address challenges throughout the organization.
Your company is presenting a panel session on sustainability for the Advanced Medical Technology Association’s annual educational conference in October in Boston. This is the first time an AdvaMed conference has devoted a panel discussion devoted to sustainability, correct?
That’s right. The conference will be held October 1-3 in Boston. Capaccio Environmental Engineering is organizing a panel session entitled “Addressing the Evolving Sustainability Demands for the Medical Device Industry.” I will be moderating the panel that will include sustainability representatives from Smith & Nephew, Johnson & Johnson, Covidien, and Becton, Dickinson and Company, who will offer their unique perspectives on emerging trends and challenges and how they are addressing sustainability in their organizations.