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ESG: what is the direction of travel for the care sector?


27th February 2024    
2:00 pm - 3:00 pm

Event Type

This webinar centred on the pivotal role of Environmental, Social, and Governance (ESG) factors in moulding sustainable business models, underlining the increasing significance of ESG in securing funding, winning contracts, and achieving accreditations. The panel comprised experts from RSM, the CQC, Essex County Council, and Barclays, who shared insights on the trajectory of ESG within the care sector, highlighting its growing importance for businesses in various ways, from understanding ESG requirements to developing strategies and its impact on external stakeholders like banks, regulators, and care commissioners.

The discussions underscored the necessity of integrating ESG into business strategies, not just for compliance but as a means to enhance a business’s attractiveness to employees, customers, and investors. Panelists shared practical steps for businesses to initiate or advance their ESG strategies, stressing the importance of starting with a clear understanding of current practices, setting realistic targets, and leveraging technology for efficiency and innovation in care delivery. The webinar also addressed funding opportunities, including sustainability-linked loans, and the role of local authorities and regulators in supporting ESG initiatives within the care sector.

Key challenges highlighted included the broad scope of ESG, the need for tailored strategies, and the difficulty in quantifying the social impact of ESG activities. However, the panel was optimistic about the sector’s direction, with advancements in technology and increased support from financial institutions and regulatory bodies promising to facilitate the ESG journey for care providers. The discussion concluded with a call to action for businesses to engage with available resources, advice, and support to develop and implement effective ESG strategies, emphasising the critical role of senior leadership in driving ESG initiatives forward.

You can watch the recording here:


What is the business case for ESG?

There are many opportunities for care businesses to harness ESG going forward. It can offer a range of benefits, such as helping your business stay closer to customers, and staff attraction, staff engagement.

Steve Ede from Essex County Council: Essex County Council (ECC) has declared an environmental emergency, therefore ESG is a key political priority for all Local Authorities.  One of the biggest contributors to carbon emissions is Adult Social Care (ASC). Essex County Council is serious about climate impact.  In terms of the procurement process, social value is typically a key part of the evaluation process.  Essex County Council commissioners typically look for carbon reduction plans, but this is not always fully evaluated. Procurement regulations are changing in October, making it easier to buy locally.  The direction of travel indicates ESG is important and will become increasingly more important, for example looking at new biodiversity considerations in each tender. Essex County Council would like to help their local providers where possible to make things, for example advising on retrofitting.  Most Local Authorities will have a scope 3 level of importance placed on the Local Authority.

April Cole from CQC: ESG is definitely on the agenda for the CQC. The CQC are active looking at ESG as an organisation. As a regulator, looking at ESG as part of their future regulatory framework.  CQC strategy will look more closely at ESG in the future in terms of having a positive impact on quality of service and sustainability. This area can have an increased positive impact on staff and residents.

What in your view is the application of ESG within social care?

Steve Fergus from Barclays: To date, application of ESG has been mixed, but more clients are engaging on ESG. Barclays are collaborating on the ‘Time to Act’ report, which has got a lot of people talking about ESG.

Further information: https://www.addleshawgoddard.com/en/sectors/health/social-care-sustainability-alliance/

Rich Hall, Head of Sustainability at RSM UK: Seeing organisations at different stages with ESG, some who have not started, and advises businesses should start as soon as they can, as there are numerous opportunities and risks coming down the line.

Steve Ede from Essex County Council: ECC has struggled to get traction with providers, which is understandable given many other pressures they are facing.  In recent tender activity, they report seeing more carbon reduction ideas, such as EVs, featuring more heavily, domiciliary care walking rounds equipment service, pledges on recycling. They are optimistic, we are turning a corner and will see an increased level of response in this area.

April Cole from CQC: ESG is quite a new area, so CQC are not formerly evaluating it yet, but hearing increasing examples of providers taking action, such as EV charging, getting residents interested in gardening.  CQC will be working on their ESG statement over the coming months. They would like to hear from providers on what they are doing about ESG.  CQC are not assessing on ESG at the moment but will do so in the future.

Further information:   https://www.cqc.org.uk/assessment/quality-statements/well-led/environmental-sustainability

What are some of the key challenges?

Rich Hall, Head of Sustainability at RSM UK: The scale of ESG is a key challenge for organisations, this includes the requirements of key stakeholders, such as residents, staff, colleagues, owners, shareholders. There is therefore a need to focus on the main KPIs, which should underpin the overarching business strategy, which needs to be consistent with the core business values.

Steve Fergus from Barclays: For operators, who are often family-owned businesses, it can take a dinner table conversation to convince the person holding the purse strings that ESG is important.  He encourages those with an interest in ESG to read more about ESG in order to build a convincing business case for decision makers.

How can businesses best monetise the impact of their ESG strategy (ie cost vs benefit analysis)?

Rich Hall, Head of Sustainability at RSM UK: It’s important to look at ESG from the operational perspective to gain efficiencies in terms of investment, as well as investment finance benefits and operational efficiencies.

Steve Fergus from Barclays: ESG is more than just a pure financial benefit, businesses also need to look wider benefits.

Please could I ask you to say more on how sustainability linked loans work with relation to the care sector?

Steve Fergus from Barclays: If a business has carbon reduction plan in place with targets, the lender is willing to reduce the lending facility cost slightly as a result.

Please contact Steve Fergus from Barclays for more information.

ESG strategy: What does good look like for care homes?

Steve Fergus from Barclays: It is important to get a plan together, measure your current energy/resources usage, think about a baseline and pulling data together.  This is what lenders are looking for.

Steve Ede from Essex County Council: Developing a strategy and a baseline is key. Anything you are doing currently is a good place to start.

April Cole from CQC: The CQC want to learning about the application of ESG in the care sector and want to hear from care providers.

Rich Hall, Head of Sustainability at RSM UK: Your ESG strategy needs to be holistic and balanced, with social at its core. It’s good to have residents and staff at the centre of it.

Please contact Rich Hall from RSM UK for more information.

Suneel Gupta, Head of Private Healthcare at RSM UK: Seen it working best where a senior person is at the top and accountable for the project and delivery of the ESG strategy.

Receive RSM’s dedicated healthcare insights visit our preference centre and select ‘healthcare’: https://news.rsmuk.com/preference-centre/

Find out more about RSM’s ESG servicesESG | RSM UK

How can technology be used to facilitate an organization’s ESG strategy?

Rich Hall, Head of Sustainability at RSM UK:  Technology can improve the operational efficiency of your estate, also innovative technologies can improve the delivery of health and patient care, such as remote monitoring, communications don’t need to be in person. It’s not just about carbon reduction, but improving resident care, such as getting people into the garden, developing positive biodiversity in your estate.

Steve Fergus from Barclays: Technology needs to take account of patient information safeguarding, data collected and stored. Digital plans and other software can be used to evidence good ESG practices and can extend to sustainability and carbon usage. Digitising areas of social care will help to influence care businesses’ carbon reduction plans.

April Cole from CQC: CQC are seeing great examples of innovation to enhance sustainability and improve monitoring. Innovation isn’t just about technology. For the CQC, people and quality of care are always at the heart of innovation.

How will the potential change to a Labour government impact the direction of travel?

Steve Ede from Essex County Council: Hope ESG as key part of the direction of travel in the care sector will survive no matter who is in power.

April Cole from CQC: Net zero commitments are being made at national level, therefore, a change in government is unlikely to change CQC approach to ESG.

It is important for providers to really delve into each of the initials of ES & G to understand and evaluate what they are already doing as a starting point as many already have good things happening under this heading.

Rich Hall, Head of Sustainability at RSM UK:  So much is already being done around climate, waste, recycling, biodiversity, but it businesses need to be able to report on it.

Steve Fergus from Barclays:  Measuring social impact is difficult, providers are likely to be doing more than they realise.


Is there likely to be funding available for providers to meet their ESG targets?

Steve Fergus from Barclays:  The Sustainability Alliance are considering how this may work in the future, for example green loans for projects, retrofit projects are costly and right now banks need to come up with more support.


What role does the panel think ESG might play in driving different ways of measuring employee engagement?

Rich Hall, Head of Sustainability at RSM UK:  ESG is already driving employee engagement. It is one of the key strands under Social to understanding what your business is doing and how you are measuring employee engagement. Traditional methods include regular employee questionnaires but also beneficial to get all levels of the business involved in ESG projects and continuous improvements.


Other comments in the chat:

As a member of several small Care Associations engaging with LA’s, ESG is a really live and important subject that will be an important subject to discuss with providers at forums etc for increased support and understanding.

It is important for providers to really delve into each of the initials of ES & G to understand and evaluate what they are already doing as a starting point as many already have good things happening under this heading.

To help providers keep track of what they’re doing under ESG, Care England created an ESG module on SMART, which is free for all care providers! https://smart.careengland.org.uk/care-homes