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As an industry, health care is one of the largest contributors to global greenhouse gas (GHG) emissions with more than 4 percent of emissions attributed to the sector.
One reason for such high GHG emissions is that hospitals are energy-intensive systems that require the use of specialized equipment and ventilations systems, 24/7 (lifesaving equipment such as MRIs, CT scans and dialysis machines). U.S. hospitals are the second-most energy-intensive building type, cumulatively spending $8.8 billion per year on energy. Decarbonization in the health care sector is critically important to global climate action. It can collectively have a real impact on meeting climate reduction targets recommended by the Intergovernmental Panel on Climate Change (IPCC), which found that global emissions should be reduced to a level consistent with only a 1.5 degree Celsius temperature increase.
Decarbonization of health care requires awareness, action and intentional investment from hospital systems, clinics, medical service providers, insurance companies, clinicians and patients in the health care system. Recently the Securities and Exchange Commission and the state of California passed mandatory climate reporting rules, and within the past year the Joint Commission and the Centers for Medicare and Medicaid Services (CMS) passed voluntary climate reporting standards and certifications.
As predicted by the IPCC, World Health Organization and others, climate change is already affecting human health. In 2019, a 9-year-old Black girl’s death in the U.K. from asthma linked to air pollution marked a global first. In 2021, an elderly Canadian woman received the first diagnosis of climate change-related health issues. While Massachusetts is one of the first states in the U.S. to create legislation requiring air quality analysis near communities that face higher proportions of environmental pollution, more action is needed.
According to CMS data, national health care expenditures grew 4.1 percent to $4.5 trillion in 2022, or $13,493 per person, and accounted for 17.3 percent of gross domestic product (GDP). Health care is highlighted as a top contributor to the 3.4 percent real GDP increase in 2023 alongside nondurable goods, retail trade, durable goods, utilities and professional, scientific and technical services. According to the U.S. Census Bureau’s County Business Patterns, the health care and social assistance sector had the highest employment of all sectors with projections to grow 14 percent from 2018 to 2028, due largely to an aging population with increased health care needs. Health care is a giant sector poised to accelerate beyond cautious steps to join forces with tech and other industries.
Health care leaders have two especially profound opportunities. In addition to ensuring quality in patient care, they can also integrate and drive sustainable practices and environmental, social and governance (ESG) strategy to drive growth for health care as a business, reduce risk for the system and build a resilient system.
Over the past decade, hospital systems have reduced some of their environmental footprint through the direct reduction of energy and resource consumption — in the form of energy efficiency measures, high-performance building constructions, and medical and regular waste minimization.
In recent years, the interconnected sustainability topics of net-zero carbon, water, circularity, zero waste, biodiversity and transportation management are being evaluated and reported via ESG platforms such as compliance, voluntary and mandatory reporting, and commercial business cases for the for-profit companies, nonprofit providers and payers in health care. Health care sustainability and ESG strategy are gaining more attention as imperative work, as the complex design and delivery challenges of long-term performance also become a growth opportunity.
Today’s sustainability work poses a paradigm shift from being able to tactically implement solutions to a measured return in the short term, to broader materiality assessment in terms of health care’s quintuple aim and its mission to heal patients. Health care leaders need to take a solutions-focused approach that is most sustainable financially and environmentally for health care and its ecosystem to reduce short- and long-term risk.
Integrating sustainability and ESG principles into health care operations yields multifaceted benefits. This integration not only drives operational efficiency, it attracts and retains top talent, enhances organizational reputation and fosters patient, member and community engagement. It also ensures regulatory compliance, improves risk management and facilitates capital access to balance return on investment in the long term. Embracing these principles fosters long-term sustainability and success in the competitive health care sector and opens up opportunities for program enrichment, climate-factor-inclusive business cases and alignment with organizational disclosures.
Future articles in this series will address — from a practitioner’s perspective — sustainable health care best practices, climate resilience, building stakeholders in the health care community, leading by example and guidance on how to set up a robust climate and health program no matter where you are in the sustainability progress and ESG journey.
Fahmida Bangert leverages 20 years of sustainability design and implementation experience in high tech, higher education and health care sustainability, corporate social responsibility and ESG in her work for enterprise-level decarbonization.
Monica L. Nakielski is a strategic adviser on ESG and sustainability with over 18 years of experience guiding Fortune 500 firms, governments, and nonprofits.
The views expressed in this article are those of the authors and not those of their current or former employers.
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