Why ESG Matters for Medtech in the Asia-Pacific Region Nearly 70% of medtech customers surveyed expect ESG will become a core purchasing criteria. By Vikram Kapur, Kevin Chang, Miki Yu, Glenda Ya-Wen Teng, and Benish Aslam APACMed | Bain & Company, Inc. Why ESG Matters for Medtech in the Asia-Pacific Foreword As a new era for the medtech industry in the Asia-Pacific region approaches, the integration of ESG considerations emerges not merely as a trend but as an imperative. Harjit Gill APACMed, CEO Vikram Kapur Bain & Company, Senior Partner, Singapore The upcoming decade promises rapid advancements in medical technology, intertwined with an intensified focus on sustainability and ethical governance. The industry can expect innovations catering to medical needs while prioritizing environmental and social concerns. The ascent of digital health solutions, telemedicine, and AI-driven diagnostics will revolutionize patient care and reduce the carbon footprint by minimizing reliance on physical infrastructure and transportation. Challenges are inevitable. Evolving regulatory landscapes, shifting consumer expectations, and the global economic milieu will present unforeseen obstacles. Yet within these challenges lie unparalleled opportunities. Medtech companies that wholeheartedly embrace ESG will position themselves as market leaders and vanguards of thought and innovation. These trailblazers will set industry benchmarks, influence policy frameworks, and command consumer trust. Collaboration remains paramount. Governments, industry stakeholders, investors, and consumers must work together to create an ecosystem that champions innovation while upholding ESG tenets. Endeavors such as cross-border research collaborations, sustainability-centric investment portfolios, and consumer education campaigns can expedite the industry’s trajectory toward a sustainable future. This report is a collaboration between APACMed and Bain & Company and brought together 15 member companies from APACMed to develop an online, comprehensive dashboard of environmental regulations specific to the medtech value chain across six markets in APAC. This was supplemented by surveys of 120 customers and more than 800 employees and various executives from medtech companies to better understand how stakeholders’ changing expectations are reinforcing the importance of ESG as a strategic priority for companies. The medtech landscape in the Asia-Pacific region stands on the brink of transformative growth. By embedding ESG in the core of this metamorphosis, the industry can ensure growth that is exponential, responsible, resilient, and aligned with cherished values. 1 APACMed | Bain & Company, Inc. Why ESG Matters for Medtech in the Asia-Pacific At a Glance Environmental, social, and governance (ESG) initiatives are increasingly becoming prioritized by customers and employees throughout the Asia-Pacific region and the world. Bain & Company and APACMed partnered to survey 120 customers and more than 800 employees on ESG considerations within the medtech industry. Medtech companies can choose to balance current competitiveness and future investments while connecting ESG to economic value. ESG in medtech requires collective industry action along three key objectives: sharing best practices, proactive dialogue, and tangible results driven by industry-wide initiatives. Society is transitioning to foster sustainable development in energy, mobility, food, health, resources, circularity, community, and finance. The United Nations member states outlined 17 Sustainable Development Goals (SDGs) in 2015 to promote holistic growth across social, economic, and environmental aspects.1 These SDGs have played an essential role in creating a global framework for sustainable development, which has led to a growing focus on environmental, social, and governance (ESG) priorities. Notably, customer awareness of ESG considerations is also rising, propelling companies to integrate sustainable practices and highlighting the pivotal link between responsible business practices and customer loyalty. However, the medtech industry faces unique challenges in aligning with these global goals, especially in the diverse Asia-Pacific region, which is growing at a rapid rate. The Asia-Pacific region represents 18% of the approximately $660 billion global medtech industry and is projected to be the fastest-growing region, with a 9% compound annual growth rate over the next five years­­.2