SEE Impact Study: "Sustainability starts with the value chain"
From agriculture to manufacturing and finance to transportation, sustainability phrases have become ubiquitous in the corporate world. Discerning between hollow buzzwords and meaningful commitments to sustainability management, however, is a difficult task for stakeholders. It requires companies and industries to understand the impacts they generate and communicate sustainability challenges transparently. But how can organizations actively pursue this commitment? A Social, Environmental, and Economic (SEE) Impact Study measures the current contribution of companies and industries across each dimension, inlcuding both the impacts resulting directly from their own operations and along the entire global supply chain. WifOR recently published a SEE Impact Study of the German MedTech industry, on behalf of the Bundesverbandes für Medizintechnologie (BVMed), the first study of its kind globally to assess an entire industry. Find out what the driving factor behind commissioning the study was and which recommendations for action can be derived from the results in this interview with BVMed CEO Dr. Marc-Pierre Möll.
Main goals of the SEE Impact Study of the German MedTech Industry:
- To quantify and present the social, environmental, and economic impact of the German MedTech industry.
- To benchmark the impact of the German MedTech along the entire supply chain against the impact of other industries in the German economy as well as the Sustainable Development Goals (SDGs) set out by the UN. The comparison is to be carried out across each SEE dimension.
- To promote transparency in the practice of the German MedTech industry and enable evidence-based sustainability decision-making by providing a solid foundational understanding.
Following the publication of the SEE Impact Study of the German MedTech industry, BVMed CEO Dr. Marc-Pierre Möll joined us in an interview to discuss the innovative project.
WifOR: The German MedTech industry is the first industry worldwide to carry out an “Impact Study” along the three sustainability dimensions (Social, Environmental, and Economic). What was your motivation as the voice of the industry, Dr. Möll?
Dr. Möll: From medical aids and implants to digital applications, the medical technology sector provides enormous added value for people and their health. Yet, at the same time, we have a responsibility to protect the foundations of life, conserve resources, respect human rights, and make supply chains more sustainable. This is a challenge we accept, and we want to play an active role in shaping solutions.
As a starting point, this requires an evidence-based understanding of where we currently stand and in which aspects we can improve. This sounds easier than it is. It means reaching agreements on key points such as methodology, measurable indicators, relevant industry comparisons, data availability and an ambitious sustainability strategy. The SEE Impact Study has created a solid foundation for measuring the sustainability of our supply chain by using key indicators and benchmarking it against other industries. Significantly, it also offers the opportunity to proactively engage as an informed stakeholder with conversations on sustainability.
Applied indicators in the SEE Impact Study (source: WifOR Institute)
WifOR: Could you outline the milestones of this pioneering project for us?
Dr. Möll: I’ll have to think back here. Discussions on the topic of sustainability were held amongst the BVMed board in December 2020, which was then followed by the passing of a resolution to explicitly include sustainability in the preamble of the BVMed constitution. This happened in April 2021 and was followed by the establishment of the “Environment and Sustainability Department” in November 2021. The aim was to place an even stronger focus on climate protection and sustainability goals. In spring 2022, we commissioned WifOR with the SEE Impact Study and at the same time established a scientific institute within the BVMed, which served as the main point of contact and sparring partner for WifOR during the following months.
Eight months later, WifOR CEO Professor Ostwald presented the study results at a public BVMed event. We have now reached the next stage in the sustainability discussion: evidence-based reporting and transparency in practice. Since publication, we have received many inquiries regarding the study from associations, individual companies, and other interested parties. We look forward to further discussions and are happy to provide information for those interested.
WifOR: Which insights did you gain from the SEE Impact Study? Were there any outcomes which were unexpected?
Dr. Möll: We were initially struck by the scope and detail of the analysis. For example, the study includes the upstream supply chains and value creation for over 188 countries across a range of industries. Within this extensive framework, not only were the total greenhouse gas (GHG) emissions resulting from the economic activity in the medical technology industry calculated, but we also received analyses on which emissions occur in which countries. This enables us to distinguish between what is produced by direct suppliers and what is produced deeper in the global supply chain. These findings also bear political relevance.
Through the study we can show that the medical technology industry has a high economic significance for the overall economy in Germany. Whilst this is important, the social and environmental indicators also highlight potential for improvement. The industry must now act accordingly to meet its social responsibility.
WifOR: You mentioned potential areas for improvement. How could the results of the study influence the MedTech industry in practice?
Dr. Möll: We see the study as the first major step towards sustainable practice and as a basis for developing a sustainability strategy in the association. We are now in a position to approach legislative procedures, at domestic and European level, with an evidence-based understanding of the social, environmental, and economic impact of the industry. This helps us, for example, in ongoing discussions concerning the Supply Chain Sourcing Obligations Act as well as with other directives coming from the European Commission's Green Deal.
Succinctly put, the SEE Impact Study provides a fundamental building block for companies to identify, manage, and avoid the risks of human rights violations and environmental damage. The analysis allows us to identify strengths but also weaknesses throughout the global supply chain and to develop sustainability strategies.
WifOR: Are you expecting other industries to follow the bold initiative of the German MedTech industry? What impact would this have?
Dr. Möll: We are paving the way for companies, associations, and industries to fulfill their environmental and social obligations with this study. It is now incumbent on these companies and industries to act boldly and ambitiously.
WifOR: What advice would you give to these other companies or industries that are open to embracing a SEE Impact Study?
Dr. Möll: As a business community, we must collectively face up to the responsibility of shaping sustainability. This means undergoing due diligence in social and environmental dimensions. We need to adopt a willingness to make the existing challenges transparent, such as child labor deep in the supply chain, and address them accordingly. Last but by no means least, I’d also mention that a dose of courage is needed.
A blueprint for corporate practice
This pioneering study highlights the strengths in terms of positive contributions generated by the MedTech industry, whilst also identifying the areas which require active improvement across the social and environmental dimensions. Moreover, the study enables impact comparison against other industries as well as the development of evidence-based strategies managing sustainability. This is a critical milestone in the transition to align global business practice with the United Nation’s Sustainable Development Goals (SDGs) by providing an unprecedented level of transparency across a whole industry.
The methodology of the SEE Impact Study is based on the definition of the medical technology sector according to the Health Economy Reporting, which the German Federal Ministry of Economics and Climate Protection (BMWK) has been using for more than a decade. It is also in line with the work of the WHO, the G20, as well as the standards of the VBA. In the future, this methodological approach will serve as a universal blueprint for companies not only in the medtech and healthcare sectors, but also for companies belonging to all industries.