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Trading in financial markets involves significant risk of loss which can exceed deposits and may not be suitable for all investors.
Before trading, please ensure that you fully understand the risks involved
Trading in financial markets involves significant risk of loss which can exceed deposits and may not be suitable for all investors. Before trading, please ensure that you fully understand the risks involved

Wednesday, April 06, 2022

Top 3 ESG healthcare companies in focus this World Health Day

Top 3 ESG healthcare companies in focus this...
Top 3 ESG healthcare companies in focus this World Health Day

World Health Organization (WHO) estimates that more than 13 million deaths, globally, each year are primarily due to avoidable environmental causes.

WHO aims to bring attention on urgent actions needed to keep humans and our planet healthy. The broader goal is to foster a drive to create societies focused on well-being.

“Our planet, our health” is the theme for this World Health Day 2022 observed on 7 April. We attempt to check both the elements of the theme by discussing 3 ESG-focused healthcare stocks, namely Anthem, Cigna and UnitedHealth.

Striking a balance between climate health and wellbeing

A planet with clean air, water, and food, will pave the way for a healthier and sustainable society. Hence the focus on developing liveable cities will ensure a symbiotic relationship between the health of the planet eventually resulting in the well-being of the people.

Our planet is reeking of the climate crisis led increasing diseases like asthma, lung cancer, and heart diseases. Thereby, urgent attention is required to make people aware that a sick climate is the predecessor to ill health.

Smart healthcare services coming mainstream

Given the prevalence of chronic diseases, governments are poised to up the healthcare budgets. According to Fortune Business Insights data, global pharmacy benefit management market is expected to rise to $740.05 billion by 2029 from $495.34 billion in 2022, at a 5.9% CAGR during the forecast period.

In this backdrop of promising growth prospects, we bring your attention to three environmental, social and governance (ESG) -focused healthcare providers. This is expected to offer a perfect blend of environment sustainability and well-being.

The companies listed below are the top three healthcare providers as per lowest ESG risk rating according to data from Sustainalytics.

Anthem, Inc. ($ANTM)

Anthem has strategically moved beyond traditional health insurance services to explore other growth avenues of healthcare including pharmacy, behavioural, and clinical domains.

In fact, the company intends to be rebranded as Elevance Health, Inc., which is subject to shareholder approval. The new name underscores Anthem’s commitment to elevating whole health and advancing health beyond healthcare.

Its digital capabilities helped provide value-based care to its customers. ANTM continues witnessing a rise in the usage of its virtual care services, which is a vital driver.

The company reported adjusted net income of $25.98 per share in 2021 which grew by 15.6% year over year.

As of Mar 2, 2022, ESG risk rating is on the lower side with a score of 11.59. The lower the risk rating, the better is the company considered in ESG perspective.

Moreover, Sustainalytics ranked the company #1 in managed healthcare companies in its 2021 Top-Rated ESG Companies report.

Cigna Corporation ($CI)

Cigna offers Pharmacy Benefit Management (PBM) and health insurance services. Its PBM services got a boost by its 2018 merger with Express Scripts with the major PBM contract being the Department of Defense.

Cigna’s strength in its Government business which includes Medicare Advantage is helping it acquire new medical members.

The company reported revenues of $174.1 billion in 2021, up 9% year over year. The company expects adjusted earnings to witness average annual growth in 6-8% range over the long-term.

Cigna is also included in ESG funds including the iShares USA ESG Select ETF. As of Mar 2, 2022, ESG risk rating is on the lower side with a score of 14.28.

UnitedHealth Group, Inc ($UNH)

UnitedHealth Group is one of the largest private health insurers. UnitedHealthcare’s strength in Medicare Advantage and Dual Special Needs Plans helped it serve 2.2 million additional people in 2021.

The company’s Optum business generated revenues of $155.6 billion, up 14.1% year over year in 2021. This was driven by strong momentum across Optum Health, Optum Insight, and Optum Rx offerings.

Moreover, UnitedHealth is included in ESG funds including the CACG ClearBridge All Cap Growth ESG ETF. As of Mar 2, 2022, ESG risk rating is on the lower side with a score of 17.54.

Company Ticker Past 6-Months Price Performance* Market Capitalization* (in $ Billion) ESG risk rating**
Anthem, Inc. ($ANTM) ANTM 31.0% 118.08 11.59
Cigna Corporation ($CI) CI 20.3% 77.13 14.28
UnitedHealth Group, Inc ($UNH) UNH 29.6% 479.88 17.54
*As of Apr 4, 2022
** Data Source: Sustainalytics

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