Regardless of company size or industry, public sustainability reporting on material ESG risks and opportunities can contribute to long-term business success and creation of shareholder value by helping companies better recognize operational efficiencies, enhance competitiveness, and identify new revenue generating opportunities. It can also help companies attract and retain talent, build brand and reputational value, and better manage an evolving regulatory landscape.

Although Chemed Corporation (“Chemed”, or the “Company”) includes high-level policies on its website related to topics such as human rights, business ethics, and environmental impacts, it lacks further transparency regarding the implementation, monitoring practices, and outcomes of such policies. Neither the VITAS nor Roto-Rooter operating businesses publish relevant sustainability disclosures.

The lack of enterprise-wide ESG disclosure at Chemed hinders the ability of investors to enhance the risk-adjusted returns of portfolios through integration of financially material ESG performance data. Although the Company’s annual report touches upon the importance to the business of topics such as human capital, cybersecurity, and ethical business practices, the discussion is at a high level and lacks decision-useful data points to understand the effectiveness of risk management policies and practices.

The need for enhanced disclosure of ESG risk and opportunity management is underscored by recent events:
 In 2022, Chemed completed a five-year Corporate Integrity Agreement (CIA) connected with a $75,000,000 settlement to resolve False Claims Act litigation brought by the US Department of Justice in 2017. Despite 95% of the VITAS segment revenues consist of payments from Medicare and Medicaid, Chemed has yet to comprehensively detail its strategy to avoid future regulatory penalties related to fraud.
 The turnover rate for clinical healthcare workers spiked during the onset of the coronavirus pandemic. VITAS has sought to stem turnover by implementing a hiring and retention bonus program at an estimated cost of $23,800,000 in 2023 yet lacks associated turnover data to enable investors to understand the efficacy of such investments.

Within the health care delivery industry, peers such as Acadia Healthcare, Amedisys Inc., DaVita Inc., HCA Healthcare, and Tenet Healthcare Corp have all responded to evolving investor expectations by regularly reporting on sustainability risks, opportunities, and associated metrics.