Creating Resilience
Sustainability and Healthcare’s Call to Action
The U.S. Department of Health and Human Services’ Office of Climate Change and Health Equity (OCCHE) has challenged health systems to decrease their carbon footprint 50% by 2030. CBRE Healthcare hosted a FOCUS Forum that explored the challenges of climate change to health systems and how three systems are responding to the call to action.
March 17, 2023 7 Minute Read
A Global Problem with Local Solutions
Sustainability and the reduction of greenhouse gases is a matter of global importance. The World Health Organization called climate change “the greatest threat to global health in the 21st century.”1On June 30, 2022, the White House announced that 61 of the largest U.S. hospitals and health sector companies had committed to the Health Sector Climate Pledge, promising a 50% reduction of greenhouse emissions by 2030.
While the pledge encompasses a national scale, sustainability begins with a clear understanding of how local hospitals contribute to greenhouse gases. In the U.S., healthcare accounts for 8.5% of greenhouse gases, including:
- 21% from Scope 1 emissions (directly from the source)
- 15% from Scope 2 emissions (generated through energy sources)
- 64% from Scope 3 emissions (indirect from the value chain)
Beyond Earth Day
The OCCHE issued the call to reduce greenhouse gases on Earth Day 2022. This pledge resulted from the work of The National Academy of Sciences, Engineering and Medicine, a nearly 100-person interdisciplinary team led by Walter Vernon, Principal and CEO of Mazzetti, and including CBRE Healthcare.A FOCUS forum panelist, Vernon noted climate change poses three key risks for health systems: resiliency, financial and regulatory.
Resiliency Risk. Vernon cited leaders at the University of Texas, who noted how freezing temperatures in Texas shut down hospitals that were unable to source water. He observed that wildfires in California have shut down hospitals as well.
The issue of resilience is [increasing] more and more in people's consciousness. And that's incredibly important because the rate of change of the physical environment has accelerated.
Financial Risk. Vernon cites financial risk as a second area of concern. “When I think about risk, I think both about how to prevent bad things from happening, but also the risk of failing to take advantage of opportunities. When people are thinking about sustainability, they often want to ask the question, what’s the business case? And how do we pay for this?”
The need to make a positive business case for sustainability faces every health system. But a hospital can simultaneously deal with the resiliency and financial risks. Vernon notes, “One of my clients said that their board called them to ask what the financial risk was with respect to energy prices because of Russia’s invasion of Ukraine.” The facility executive quickly pointed out that they had shifted largely to renewables and had put in place fixed energy contracts. This hospital’s energy initiatives positioned them to withstand the fluctuations in the energy markets.
The need to make a positive business case for sustainability faces every health system. But a hospital can simultaneously deal with the resiliency and financial risks. Vernon notes, “One of my clients said that their board called them to ask what the financial risk was with respect to energy prices because of Russia’s invasion of Ukraine.” The facility executive quickly pointed out that they had shifted largely to renewables and had put in place fixed energy contracts. This hospital’s energy initiatives positioned them to withstand the fluctuations in the energy markets.
I’ve worked with a treasurer of a national health care organization, and he says we should stop talking about ROI. On this topic, the thing to do is to talk about what’s necessary, and we financial people can design the right financial strategies to pay for things.
Regulatory Risk. Vernon acknowledges that the matter of sustainability is hitting the regulatory environment at federal, state and municipal levels. The National Academy of Sciences, Engineering and Medicine is working with various agencies, including the OCCHE, on how to respond. Vernon observes, “there is a dichotomy in the way that we're moving. The National Academy of Medicine is putting together a regulatory agenda…and even the Joint Commission is part of this collaborative effort as they evaluate their role in sustainability.”
The Sustainability Pathways for Health Systems is a progression of Environmental and Sustainability (E&S) activities commencing with energy efficiency (Milestone 1) and progressing to sustainability activities (Milestone 2) and, eventually, a comprehensive environmental program (Milestones 3 & 4). This map provides a straightforward approach for a health system’s E&S team to programmatically implement its energy and sustainability initiatives.
During the 1970’s, Cleveland was branded “the mistake on the lake” due to the deplorable condition of Lake Erie. Since that time, due to aggressive environmental efforts and significant community involvement from organizations like the Cleveland Clinic, Lake Erie has been revived and Cleveland has become the beauty on the lake. The Cleveland Clinic’s Jon Utech, Senior Director, Office for a Healthy Environment, presented the clinic’s journey to build a high-impact sustainability program. The program is underpinned by three sustainability pillars: Community Health, Environmental Health and Economic Health.
The Cleveland Clinic has identified and addressed 12 decarbonization impact streams with clear targets extending into 2050. They have also addressed key challenges facing their sustainability efforts, focusing on the trade-offs of initial start-up costs vs. life cycle recurring costs, the impact of technology, the inherent challenges of power-purchase agreements and the extended impact of the pandemic. This comprehensive approach has allowed the Cleveland Clinic to advance on the sustainability roadmap.
But this journey has not been without its challenges. The competing capital needs of an organization can stall a decarbonization effort. Utech and his team have introduced the Cost of Carbon into the decision-making process: “We have been exploring pricing carbon into our decision-making so that we can better account for the price of carbon in our decarbonization efforts. With this approach, we think we will make better decisions.”
DaVita’s program led, in part, to the recent development of the company’s first all-electric, net-zero energy dialysis clinic, a landmark industry accomplishment.
DaVita has also experienced success in the complex world of Power Purchase Agreements (PPAs). Wilzbacher observed that “at a recent meeting, DaVita’s leadership acknowledged the evolution of the sustainability team from a great program to get our teammates thinking about sustainable lifestyle choices, to becoming a profit center [due to the PPAs].” Wilzbacher thinks, “a strong reputation of [a health system’s] sustainability team allows all of us to do more.”
The Long and Winding Road: The Sustainability Journey
Vanita Negandhi, CBRE Healthcare’s leader for sustainability, has developed a pathway for health systems to benchmark against in their sustainability journey.FIGURE 1: Sustainability Pathways for Health Systems
The Sustainability Pathways for Health Systems is a progression of Environmental and Sustainability (E&S) activities commencing with energy efficiency (Milestone 1) and progressing to sustainability activities (Milestone 2) and, eventually, a comprehensive environmental program (Milestones 3 & 4). This map provides a straightforward approach for a health system’s E&S team to programmatically implement its energy and sustainability initiatives.
Client Success in Sustainability
The Beauty on the Lake: The Cleveland ClinicDuring the 1970’s, Cleveland was branded “the mistake on the lake” due to the deplorable condition of Lake Erie. Since that time, due to aggressive environmental efforts and significant community involvement from organizations like the Cleveland Clinic, Lake Erie has been revived and Cleveland has become the beauty on the lake. The Cleveland Clinic’s Jon Utech, Senior Director, Office for a Healthy Environment, presented the clinic’s journey to build a high-impact sustainability program. The program is underpinned by three sustainability pillars: Community Health, Environmental Health and Economic Health.
FIGURE 2: The Three Sustainability Pillars | Cleveland Clinic
The Cleveland Clinic has identified and addressed 12 decarbonization impact streams with clear targets extending into 2050. They have also addressed key challenges facing their sustainability efforts, focusing on the trade-offs of initial start-up costs vs. life cycle recurring costs, the impact of technology, the inherent challenges of power-purchase agreements and the extended impact of the pandemic. This comprehensive approach has allowed the Cleveland Clinic to advance on the sustainability roadmap.
But this journey has not been without its challenges. The competing capital needs of an organization can stall a decarbonization effort. Utech and his team have introduced the Cost of Carbon into the decision-making process: “We have been exploring pricing carbon into our decision-making so that we can better account for the price of carbon in our decarbonization efforts. With this approach, we think we will make better decisions.”
Community First, Company Second: The DaVita Sustainability Journey
With more than 2,750 outpatient dialysis centers in the U.S. and 352 internationally, DaVita is a healthcare provider focused on transforming care delivery for patients globally. Jeff Wilzbacher, Senior Director of Energy & Sustainability, highlights DaVita’s Village Green program focusing on five workstreams.
FIGURE 3: DaVita’s Village Green
DaVita’s program led, in part, to the recent development of the company’s first all-electric, net-zero energy dialysis clinic, a landmark industry accomplishment.
DaVita has also experienced success in the complex world of Power Purchase Agreements (PPAs). Wilzbacher observed that “at a recent meeting, DaVita’s leadership acknowledged the evolution of the sustainability team from a great program to get our teammates thinking about sustainable lifestyle choices, to becoming a profit center [due to the PPAs].” Wilzbacher thinks, “a strong reputation of [a health system’s] sustainability team allows all of us to do more.”
Providence’s Environmental Stewardship
Providence is a multi-state, faith-based health system based in Renton, WA. Providence’s Mike Denney, Group Vice President of Real Estate Strategy & Operations, shared the key elements of their sustainability journey, beginning with a commitment to a three-pillar social responsibility framework of diversity, equity and inclusion. Providence has established a structure for success that includes Waste, Energy/Water, Agriculture/Food, Chemicals and Transportation (WE ACT).
Denney states, “Environmental stewardship in a large healthcare organization is complex and tracking progress across multiple categories of carbon reduction is needed to make certain we achieve our carbon-negative goal.” Providence collects data from all 52 hospitals, over 1,000 outpatient clinical sites, and multiple business units to better understand and manage their environmental footprint across multiple sources of carbon emissions. These categories are reflected in the comprehensive WE ACT scorecard.
Within its WE ACT sustainability efforts, Providence has engaged with employees to form Green Teams. A few initiatives started by their Green Teams include:
Within its WE ACT sustainability efforts, Providence has engaged with employees to form Green Teams. A few initiatives started by their Green Teams include:
- Waste: Two hospitals are already meeting the 2030 50% waste-reduction goal.
- Energy and water: 26 health care facilities are powered with 100% renewable electricity and one campus achieved Carbon-Neutral Scope 2 status in March 2021.
- Agriculture and food: Several gardens, CSA programs and a prescription produce program offer fresh local produce to people with chronic health issues.
- Chemicals: Providence has reduced greenhouse gases from anesthetic agents by 69%, and 96% of computer purchases meet EPEAT standards.
- Transportation: 2021 saw an 86% reduction in business trips compared with 2019.
All Roads Lead to a Cleaner Environment
Each of these health systems demonstrate that the journey to carbon-emissions reduction can follow many different paths. The destination is worth the effort: a world transformed, a cleaner and healthier environment and a planet for current and future generations to enjoy.
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