ESG reporting at Duomed: Company and staff driven by conviction

Duomed is a leading European medical equipment distributor specializing in endoscopy, surgery, critical care, medical imaging, patient monitoring, and infection prevention. They offer comprehensive solutions that include medical equipment, accessories, technical services, IT integration, clinical training, and education.

“We started investing in ESG in 2022. We firmly believe that as a distributor, we can make a unique contribution to help ensure that the healthcare sector is more sustainable. Furthermore, we want to be prepared in time for the complex reporting requirements imposed by the Corporate Sustainability Reporting Directive (CSRD),” said Jan Van de Meersch. “This evolving legislation makes ESG an increasingly significant pillar to focus on. Moreover, our employees, clients, and investors also expect us to be committed to this. We see this in tenders from hospitals, for example. If we want to continue to be their preferred partner, we must have a greener product offering and communicate our sustainability policy transparently.”

Jan Van de Meersch explained that his role at Duomed has also shifted as a result. “Until 2022, I only took on the role of Chief Marketing Officer. In 2023, this position was expanded to include the sustainability policy. First, we identified the requirements before investing in additional recruitment in this area. We now have ESG Officers in all our businesses and have recruited a Corporate Sustainability Officer.”

Duomed has fourteen sites, each of which will self-report their energy consumption, for example. Most of these are acquisitions, businesses with their own structures, management teams, and finance departments. Some had already set up some certifications and environmental systems, while at others ESG was not yet on the agenda at all. “So far, we have mainly tried to identify all of that as best as we can, and we have also made some organizational changes to make the data available,” said Jan Van de Meersch. “For this purpose, we called on people who do this in addition to their normal duties. Fortunately, these people were already convinced of the value of ESG and, therefore, had the necessary motivation. The challenges for the coming years will be integrating our sustainability views into our corporate culture and strategic decisions.”

Fragmented data

While in many companies, the finance department takes the lead in sustainability reporting, Duomed’s finance department mainly plays the role of data provider. Jan Van de Meersch: “Of course, they have all the invoices for energy, the vehicle fleet, travel, and so on, giving them a good overview. At a group level, our Corporate Controlling department is responsible for data consolidation. Those consolidated data are also sent to our investors and banks because we get a discount on our loans, for example, if we meet certain KPIs. In turn, the Sustainability Team and I are responsible for developing the specific actions.”

“That’s certainly an approach we see quite a bit,” said Mario Matthys. “Finance is actually more of a process owner than an operations team because they have already mastered processes such as capturing, reporting, and consolidating when it comes to financial reporting. The data owners then supplement this for each topic with their specific non-financial data. You can have up to 1,200 data points based on your double materiality analysis. HR, for example, is an essential supplier for this.”

“Indeed, one of our greatest challenges is that the data tend to be very fragmented,” says Jan Van de Meersch. “The companies in our group range from 10 to 300 employees. For example, in Belgium, we have separate finance departments, HR departments, operations, etc. This means a lot of data are already logged and can be delivered ready to use. Smaller companies with ten employees often only have one point of contact to collect the data for all these different domains. This lengthens the process and causes data to be delivered incompletely or in an incorrect format. Together with our corporate controllers, we are now looking at how we can support them in this and standardize the data points.”

Embedded narrative

The year 2023 was all about outlining an overall ESG strategy for Duomed to set up group-level reporting. While that strategy is modeled on the UN’s SDG goals, the company also signed the UN Global Compact. As a result, sustainability has become a core value. “I think it is encouraging to learn that the whole ESG narrative is already embedded in the corporate strategy,” said Mario Matthys. “Many companies, some even publicly traded, are not yet at that level.”

In fact, we now have a Sustainability Team working within Duomed, said Jean-Paul Corin. “This truly multidisciplinary team includes people from HR, logistics, marketing, and finance and is led by one of our Business Unit Managers. They are all people with deep intrinsic motivation for sustainability, both professionally and privately. We also recruited a Sustainability Officer at group level; there was little discussion about this. The CEO and CFO shared that vision, and it was also common sense for the private equity partners. They, too, regarded it as an investment: it needs to be done and will pay off in the long term.”

Duomed will publish its first concise sustainability report in 2024. Although we are not yet obliged to do so, we are already willing to accept the challenge. “Currently, it is a task for the Sustainability Team,” said Jan Van de Meersch. “On the other hand, we don’t want to rush into it either. We could immediately hire four or five people for that team, and they would all have meaningful full-time jobs. But as a business, we need to look at what is required. As soon as we effectively start with CSRD reporting, we have to decide whether we are going to recruit more broadly or outsource it to an external partner.”

Leverage

All discussion partners agreed that the skills needed to set up substantiated ESG strategy and reporting are not readily available. Mario Matthys specifically mentions leading by example, proactivity, empathy, and the ability to give feedback as indispensable qualities for a competent sustainability specialist. In turn, Jan Van de Meersch attended various courses at Vlerick and others. “That way, you will at least know all the frameworks that are used,” he said. “At the same time, however, we also recognize that it is difficult to be perfectly aware of everything because so many different standards are used.”

Jean-Paul Corin believes it is essential not to recruit too quickly and thoughtlessly. “We still have much to learn about what we do and do not need. That is why it is pointless to bring in a lot of expertise now because there is a good chance that this knowledge will no longer be of any benefit in two years’ time. That is precisely the context that offers opportunities for our employees to work on their own sustainable careers within the ESG reporting narrative. The members of the Sustainability Team personally reached out to be a part of it. At Duomed, the fact that they can evolve within their jobs and work on a topic they are passionate about allows us to make and keep them happy. Currently, they take on the ESG aspects in addition to their existing duties out of enthusiasm. The main challenge for the coming year will be to incorporate this in a structural way as much as possible. When tasks are added, it is pertinent to ask whether all the standard tasks someone performs add value to the company. Identifying that and engaging in a dialogue with employees about it gives them purpose in their jobs.”

From consolidator to ESG specialist

“Having a substantiated ESG strategy and reporting does take some manpower, but fortunately, it is often just the leverage you need to attract additional talent,” said Mario Matthys. “If you are not on board with the new ESG regulations, you will soon discover the commercial drawbacks and the difficulties in attracting new talent. Young people simply don’t want to work for a company anymore that says, ‘We’re not going to participate in all that ESG stuff.’ I recently had a client with a job opening for a ‘consolidator’, and they couldn’t find anyone for it, literally no one. Then, someone had the idea to call that position ‘ESG Consultant’. They very quickly got several candidates.”

“We also have many people who want to work on the ESG team,” said Jean-Paul Corin. “Being a medical company, we are already purpose-driven, but this reinforces that idea even more. Besides, the healthcare industry is one of the most polluting sectors. For example, we rank very poorly in terms of waste and emissions. This is even more reason to prioritize sustainability at Duomed.”