Hospitals, MedCity Influencers

Why sustainability is sound business for healthcare providers

By moving decisively to address waste, emissions and social inequality, organizations can turn sustainability into a competitive advantage. Here’s how.

When the nonprofit environmental disclosure platform CDP revealed its 2021 list of 1,300 companies whom institutional investors are calling upon to share data about their environmental impact, dozens of companies from the healthcare, biotech and pharmaceutical industries made the list.

More than 150 institutional investors and financial institutions, representing $17 trillion in assets, signed on to CDP’s annual campaign. They’re part of a growing chorus of investors, regulators, policymakers, business and supply chain partners, communities and workers calling for businesses across a broad range of industries to be more forthcoming about their environmental and sustainability-related activities. But it’s not only external pressures that are motivating organizations to shift sustainability to the core of their business. Many are realizing that doing so creates new value for the customers and communities they serve.

The push toward carbon neutrality, zero emissions, zero waste and social responsibility is only beginning, led by organizations like the Value Balancing Alliance, a group of multinational companies that is seeking “to establish a uniform, internationally recognized valuation method for calculating reliable sustainability metrics.” Those metrics are likely to focus on the social and community impact a company has. Like CDP, the Value Balancing Alliance includes members from healthcare-related industries alongside big-name brands from finance, automotive, manufacturing and elsewhere. [Editor’s Note: SAP is a member of the Value Balancing Alliance]

Synced, standardized sustainability initiatives like these build on the well-intentioned but uncoordinated efforts of individual companies. They are aligning organizations from multiple industries around a shared sense of social responsibility, a desire to lead by example, and the realization that future profitability could well depend on behaving sustainably, given the increasing weight that environmental and social issues carry in the choices that employees, patients and partners make. Behind those sustainability pursuits are three main drivers:

  1. CLIMATE ACTION — moving toward zero emissions. This is largely about reducing carbon footprint and greenhouse gas emissions.
  2. THE CIRCULAR ECONOMY — moving toward zero waste. This speaks to practicing the circular principles of repurposing, recycling and/or reusing materials and products.
  3. SOCIAL RESPONSIBILITY — moving toward zero inequality in their interaction and engagement with patients, customers, employees and the communities they serve.

Following a recent deep dive to gain a sense of how the healthcare industry is approaching the sustainability issue, my team and I found, generally, that many companies are in the early stages of determining their strategies with respect to issues like waste, emissions and inequality. Not surprisingly, our research identified organizations that stand out for the substantial progress they’re making in one or more of these three areas.

It also revealed a handful of capabilities that, in our estimation, are critical to accelerating progress in implementing and acting upon sustainability goals. The ability to measure and report data points on their internal operations is a good starting point for organizations, to establish where they stand from a compliance perspective, and with respect to their goals and their peers. Healthcare companies need integrated tools to collect and track the make-up, and prove the origin, of the materials and equipment they use, along with the energy their operations consume and the emissions they produce, with the ability to standardize and tailor that data to meet potentially widely varying disclosure and reporting requirements.

That data has an important story to tell, for by applying analytics tools to it, organizations can uncover the most cost-effective pathways for minimizing waste and environmental impact. For example, a large Swiss hospital network is actively measuring, and taking steps to reduce, its use of volatile anesthetics, and the energy consumption of its MRI and CT devices, while another Swiss provider is purchasing only renewable hydroelectric power for its facilities. In the U.S., a large healthcare network is working to reduce waste via initiatives like a pledge to consume 1.9 million fewer single-use plastic bottles annually at its care sites. 

Housing all that sustainability data on a readily accessible, enterprise-wide digital platform leads to another important organizational step in the drive toward sustainability: integrating new sustainability-related KPIs with more traditional financial KPIs and embedding them across the business. These sustainability KPIs — around women in leadership, carbon emissions, employee retention, etc. — help to sync an organization internally to the organization’s sustainability strategies, serving as a holistic steering mechanism and a way to demonstrate the value an organization’s activities are bringing to the community and society.

There’s a growing realization among healthcare companies that they are not in this alone — that their sustainability initiatives are fundamentally intertwined with, and impacted by, the actions of their value chain: suppliers, partners, vendors, etc. According to estimates from the CDP, emissions from healthcare/pharma/biotech supply chains are 7.9 times higher on average than those produced from direct company operations. The reality is that having supply chain partners with poor sustainability performance can undermine a company’s own sustainability goals and initiatives, so companies must have the ability to evaluate supply chain partners based on their sustainability performance.

This level of accountability is predicated on healthcare providers being digitally networked across the supply chain so they can share data, verify its origin, ensure accuracy and make decisions based on credible, auditable documentation. This business network also can be a catalyst to companies collaboratively designing and developing new services, treatment processes and systems with waste- and emission-reduction in mind, so they’re aligned and sharing risk in working toward their sustainability goals especially with regard to the increasingly important satisfaction of patients and their relatives and their primary goal of a sustainable recovery

With a business network or ecosystem that stretches beyond company and even industry borders, healthcare companies are better positioned to explore circular pathways for repurposing, recycling and/or reusing resources, materials and products. A hospital could work with its energy utility and renewable energy companies to develop their own solar or wind power generation sources to meet the needs of their facilities, for example.

Let’s not overlook perhaps the most critical factor in the success of any sustainability initiative: people — and in particular, an empowered, engaged workforce. That starts with an organization-wide alignment around the goal of zero inequality in the treatment of patients as well as employees. Because simply put, the more engaged and empowered employees feel in their jobs, the better equipped they will deliver outstanding patient outcomes. And the better the initial outcome, the fewer additional interventions are required, and thus, the less drain on hospital and healthcare resources.

So, having HR tools to keep tabs on employee mental and physical well-being, and to better manage employee workload and stress, ultimately does tie directly back to sustainability goals.

How does your healthcare organization view and manage sustainability issues? Weigh in by taking SAP’s short survey here. We’ll plant a tree for each response we receive.

Photo: Petmal, Getty Images

 

 

 


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Carsten Gieren

Carsten Gieren is the Global Sustainability Strategy Lead for Healthcare Providers at SAP. The optimization of business processes together with his customers is a guiding theme throughout Carsten's career. Achieving this goal in a sustainable manner is all too natural for him.

As Global Strategy Lead for Sustainability in the Healthcare Provider industry, he is particularly interested in hearing from his customers about their definition of the right balance between ecological, economic, and employee-related goals in that sector. Carsten brings with him extensive knowledge of healthcare and IT development from his time in emergency rescue, hospitals, HR Services and at SAP. He has studied Political Science and International Humanitarian Aid at the University of Applied Science, Aachen and still lives in the region south of Aachen, Germany.

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