The rating puts Alibaba Health in the top tier of China's Internet healthcare industry
The major index provider MSCI (MSCI:NYSE) recently upgraded Alibaba Group’s healthcare affiliate Alibaba Health’s (0241:HK) ESG rating from BBB to A in March 2022.
The Hong Kong-based company was initially rated Bin November 2017, and for the next two years, the rating was raised consecutively to BBB, on par with companies like Amazon and Facebook. In 2020, MSCI maintained the triple-B rating for Alibaba Health.
MSCI is one of the three largest index providers in Europe, the other two being FTSE Russel and S&P Dow Jones Indices.
MSCI ESG ratings range from leader (AAA, AA), average (A, BBB, BB) to laggard (B, CCC), and have covered over 2,900 companies globally.
ESG is an abbreviation for environment, social and governance, while ESG ratings are developed to function as an evaluation standard that measures a company’s resilience to long-term risks in these three aspects.
ESG ratings are used by individual investors and institutional managers to guide investment strategies by understanding potential sustainability risks to business performance. Companies also leverage ESG ratings as an internal benchmarking tool to help improve sustainability and for potential public relations opportunities.
The upgrade reflected the international market's recognition of Alibaba Health's achievement in corporate governance and social responsibility over the past year.
According to the company’s 2021 annual report, it has devoted to several philanthropic health promotion campaigns such as “Global Drug Search Alliance.” Alibaba Health has also been focusing on the health issues of the poor population.
By leveraging Alibaba Group’s digital technology, the company partnered with the government to improve the county-level healthcare systems, in order to contribute to the sustainable development of healthcare in rural areas.
Emphasis has also been given to employee training and development, with an average of 81 hours of training per person for the fiscal year of 2021. In terms of employee diversity, 40% of Alibaba Health employees were female during the reporting period.
Alibaba Health has also adopted effective quality control measures throughout the entire supply chain, and also established a dedicated quality control team to improve the overall medication safety.