- ESG in Healthcare
- Environmental Definition
- Healthcare's Impact on the Environment
- Why is Healthcare Lacking?
- Environmental Initiatives in Healthcare
- Next Steps in ESG for Healthcare
ESG in Healthcare
Environmental, Social and Governance is an increasingly trending framework that organizations in all sectors utilize to prioritize their social responsibility in their operations, and it also allows organizations to demonstrate their commitment and impact to their client base, members, and shareholders.
As we've discussed, the publicly-promoted prioritization of ethics and values in organizations is undoubtedly in an effort to drive investors and generate profits, but there's an overwhelming global impact of these missions, and some industries are more inclined to promote awareness and change to their global impact, and healthcare is one such industry that is generally in alignment with impactful change to better humanity.
Despite the overlap in common healthcare initiatives and ESG's drive for sustainability and overall wellness, the healthcare sector has been historically slow to move on implementing necessary changes to instill safer and better practices through ESG initiatives; however, the unavoidable ramifications of the COVID-19 pandemic forced all industries, especially healthcare, to make sweeping changes to their processes and operations.
These changes in response to COVID-19 were obviously made to prioritize and ensure wellness for the public and for the healthcare workers on the front lines, and the protocols also helped healthcare organizations push their ESG initiatives into existence or overdrive.
Let's look at what the E (Environmental) in ESG looks like in healthcare facilities and management and why these practices are not just financially sound, but also proponents for wellness and goodwill in a multi-trillion-dollar global industry.
According to Market Business News, Environmental means examining how a business performs as a steward of our natural environment. They go on to elaborate on the criteria by focusing on:
- waste and pollution
- resource depletion
- greenhouse gas emission
- climate change
Simply put, every company uses energy and resources. Therefore, every company is affected by and affects its environment.
S&P Global focuses on Environmental in their blog, highlighting:
The environmental portion of ESG considers how a company performs as a steward of the physical environment.
The "E" takes into account a company's utilization of natural resources and the effect of their operations on the environment, both in their direct operations and across their supply chains.
Companies that neglect to consider the effects of their policies and practices on the environment may be exposed to higher levels of financial risk.
Climate change adds an extra layer of environmental risk. The global regulatory response to the threat of environmental risks has been mixed.
Companies and investors often lack a common framework for assessing their ESG risks and opportunities.
Other examples previously used are waste & pollution, energy efficiency, and climate change.
Healthcare's Impact on the Environment
Environmental encompasses so much that it can be difficult to fully comprehend. However, it is one of the biggest opportunities for healthcare providers, and not just because many investors think the E in ESG is the most significant.
The unfortunate reality is that the healthcare industry is an important contributor to harmful environmental pollutants that negatively affect our health and planet.
Hospitals produce more than 5 million tons of waste each year.
The U.S. healthcare sector generates annual revenue in the billions1 with about a third considered wasteful or lacking in value. In the United States health sector, greenhouse gas production amounts to roughly 10% of all greenhouse gases produced annually2 with increasing emissions.3
Hospitals generate over 29 pounds of waste per bed per day. A waste plan is critical for any sustainability programming.
While this is a global issue we can discuss in perpetuity, our focus here is on ESG in the U.S. healthcare system.
The US health care system is responsible for about a quarter of all global health care greenhouse gas emissions, which is more than the health care system of any other nation .
That's a staggering realization, and the efforts to mitigate this type of pollution and waste are as vast as the healthcare industry itself; however, an absolute imperative for all healthcare facilities and practices is hygiene and safety, especially in indoor air quality.
The more stringent standards for air quality and the elimination of airborne bacteria in our healthcare facilities in the wake of the COVID-19 pandemic have undoubtedly increased the global emissions and waste in healthcare, as more energy and materials are required to ensure continuous cleaning, especially in air filtration systems.
Why is Healthcare Lacking?
There are many reasons why healthcare may be lacking the resources or capabilities to address these environmental concerns. A few most notable include:
- Lack of Investor Pressure5
- Prioritizing Crises, like COVID-1955
- No Transparency in Reporting55
- Missing Dedicated Personnel
John Maxwell, a business professor at Indiana University, notes that organizations need baseline data and progress reports, something that many nonprofits are not doing yet.
Environmental Initiatives in Healthcare
There are many systems in existence to ensure proper safety standards in indoor air quality, and they vary in their processes, maintenance needs, and energy output.
"ActivePure allows commercial buildings to pursue the virtuous cycle of ESG more easily through achieving the highest indoor air quality standards without increasing their carbon footprint. As the pandemic becomes endemic, companies should not have to choose between protecting their workers or protecting the environment."
Selecting technology that mitigate healthcare's toughest pathogens is a must, but there are ways to ensure environmentally-minded safety measures in indoor air quality, and that exists in technologies that provide full-facility continuous surface and air disinfection without the energy needs of less advanced systems.
As with careful selection in technologies to promote wellness within medical facilities, more environmentally-conscious efforts in the actual construction of healthcare facilities plays a massive role in mitigating climate impact and showing investors and patients that change is possible and worthwhile.
Various certifications exist to promote sustainability and responsibility in construction and to provide voluntary guidelines to help companies make meaningful construction measures promote social responsibility in actionable ways.6
ActivePure has been a member of the U.S. Green Building Council (USGBC) since 2008. We're proud proponents of LEED certification, which "are proven to save money, improve efficiency, lower carbon emissions and create healthier places for people. They are a critical part of addressing the climate crisis, meeting ESG goals, enhancing resilience, and supporting more equitable communities."
U.S. healthcare industry is a major producer of cast amounts of environmental emissions, which is juxtaposed to their overarching mission to "First, do no harm." Healthcare organizations at every level should be taking concrete steps to measure and mitigate their carbon emissions to facilitate safer practices within and outside of the industry, and small changes in filtration and governance over structural building are just a couple of ways healthcare can do just that in major ways.
Next Steps in ESG for Healthcare
Sustainability studies and reports are more commonplace in business operations now, and they are ways for organizations in every sector to gauge their impact and efforts. Reports for self-governance can include ways organizations have adapted technologies to improve sustainability, such as zero-wasting policies, water conservation, and mobile phone technologies which help reduce carbon consumption.
The healthcare industry is questionably the most criticized, regulated, and important cornerstone of our society and is common metric for the wellness of a nation. Working to satisfy patient need in tandem with ROI and the governing agencies that oversee the industry is a staggering feat, but working efficiently and effectively is a real possibility for healthcare.
Setting standards, both internal and government-imposed, allows healthcare practices that promote higher standards of care, higher standards of workplace wellness, and most importantly, more access to sustainable and affordable health care for their communities.
If you're interested in learning more about ESG and the regulation around indoor air quality, register for ActivePure's August 10th webinar, At the Intersection of Infrastructure and Sustainability: The Future of Corporate Resilience.
In it, our expert panelists will explore the White House guidance and complications, the impact on ESG goals, and how companies can sustainably incorporate improved indoor air quality.
- Dr. Deborah Birx, former White House Coronavirus Task Force Coordinator and Chief Medical & Science Advisor for ActivePure
- Heidi DuBois, Global Head of Environmental, Social and Governance ("ESG") at AEA
- Chris Wallace, President and CEO of the North Texas Commission
- Amy Carenza, Chief Commercial Officer for ActivePure
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1 NHE Fact Sheet | CMS
2 HHS will prod hospitals to cut carbon emissions | Modern Healthcare
3 Environmental Impacts of the U.S. Health Care System and Effects on Public Health - PMC (nih.gov)
4 Health Care Pollution And Public Health Damage In The United States: An Update | Health Affairs
5 Health Care Firms Lagging in Addressing the E in ESG | Corporate Counsel (law.com)
6 68 of the greenest hospitals in America | 2018 (beckershospitalreview.com)
7 Synergies Between LEED, WELL Certifications And ESG Programs (facilityexecutive.com)