Sustainability Performance Indicators and Firm Financial Performance in the Healthcare Sector during Crisis Period

Abstract

Starting with the pandemic period, the healthcare sector was expected to consider measures aligned to the evolving needs of patients and communities. Healthcare providers were keen to adopt environmental and social strategies to overcome crises, but those were postponed due to multiple health-war-climate crises. The aim of this research is to observe whether sustainability performance is reported during crisis periods and its implication for sustainable performance and profitability of healthcare companies. To investigate the sustainability indicators reported by the healthcare sector and their implications during the crisis period towards companies’ performance, a sample of 199 listed European companies was used to perform a quantitative analysis based on descriptive statistics of the mean, standard deviation, minimum, and maximum reported values. The data sample was collected from the Refinitiv Eikon database for the period 2020-2022. The sustainability performance indicators used in the analysis are ESG scores, ESG Controversies, Environmental Pillar Score, Social Pillar Score, Governance Pillar Score, CSR Sustainability Committee Score, Board Size and Board Gender Diversity Score, while for analysing the firm financial performance indicators, the study uses ROA, ROE, Assets Turnover, and Number of Employees. The results of the study reveal that European companies in the healthcare system took measures and reported sustainability along with firm financial performance during the crisis period. Descriptive statistics revealed that healthcare sector companies reported sustainability information in ESG reporting and ESG controversies without being involved in any controversies. The social pillar was the focus of the sector, as it was the most affected during this period. ROA and ROE recorded negative values, while Assets Turnover showed that healthcare sector companies effectively used their assets to generate sales during crisis periods. The novelty of the study is reflected in the analysis of sustainability and financial performance indicators reported by European listed companies in crisis periods.