Healthcare decarbonization through cross-company collaboration

As the healthcare industry focuses on reducing greenhouse gas emissions across the ecosystem, the proverb “many hands make light work” must guide our efforts. Only through collective action can healthcare companies, from manufacturing to patient care, build critical mass and fund initiatives to create a sustainable system. The COP26 Healthcare Task Force, organized during the 2021 United Nations Climate Change Conference, continues its work to develop a framework for 2025 that sets standards to meet interim carbon reduction targets and achieve net-zero status by 2050.

The healthcare supply chain is highly specialized, with advanced manufacturing processes, significant regulation, long lead times and numerous pass-through points before products reach patients. The industry is also challenged by record drug shortages. No organization acting alone can optimally guide the financial resources, human capital and technical know-how for rapid decarbonization to work and for investments to succeed across the value chain.

Shared standards, metrics and tools will prove critical for suppliers and partners to meet project timelines and meet clear objectives. Gaps in communication, expectations and strategic coordination may hinder compliance from suppliers’ sustainability teams.

Companies that don’t participate in decarbonization risk financial loss and reputational harm. As health systems, consumers and investors weigh their options, they may prefer the sustainable choice. EU pharma and healthcare organizations recently shared how they expect sustainability requirements will affect their operations.

More information is available from the:

• Alliance for Transformative Action on Climate and Health
• Health Systems Task Force

In the pursuit of a more sustainable healthcare industry, aligning stakeholders’ priorities, establishing clear standards and timelines and creating synergies through joint action are crucial. Health system networks and pharmaceutical companies share the overall goal of sustainability, but their priorities and supplier engagement strategies may differ. With common targets, strategies and platforms, suppliers and healthcare companies can save resources to meet those goals. Addressing sustainability challenges requires collaborative efforts and open dialogue. Here are a few actions healthcare companies can take now: 

Organize collaboration summits

Organizers can facilitate questions and share best practices, benchmarks and global reporting initiative templates. These summits provide a platform for introducing suppliers to targets and frameworks, levers they can use to decarbonize and foster an environment to discuss methodology.

Pursue group purchasing opportunities

Opportunities can be explored, such as renewable energy certificates, power purchase agreements, carbon credits and sustainable aviation fuel. By leveraging collective buying power, healthcare organizations can access more cost-effective and environmentally friendly solutions at an accelerated pace.

Set clear governance for healthcare industry engagement

Plan for regular check-ins and milestones to evaluate industry progress, ensure accountability and boost compliance. Along the way, identify necessary adjustments such as added training and incentive opportunities to facilitate continuous improvement across the sector.

Create financing-based sustainability targets

Group financing can be pursued between banks and private lenders with healthcare companies, creating qualification requirements for sustainability-linked bonds. This approach incentivizes sustainable practices and streamlines the process for banks by eliminating the need for individual negotiations with healthcare companies. Ultimately, companies would have a vested interest in achieving sustainability goals to obtain better rates over traditional financing options.

Advance open-source digital health solutions

Digital health solutions can play a pivotal role in increasing healthcare access, help close equity gaps, promote operational efficiencies and reduce unnecessary emissions. The current approach, which often requires significant work and investment by individual companies, can be optimized through collaborative efforts and shared resources.

Now. If healthcare were a country, it would be the world’s fifth-largest producer of greenhouse gases. Its Scope 3 emissions would encompass roughly three-fourths of the greenhouse gases produced across the healthcare ecosystem. While sustained effort is required to eliminate myriad carbon sources, the industry can start with common areas to make early progress and build momentum, such as setting science-based targets in line with limiting global warming to 1.5 degrees Celsius above preindustrial levels, encouraging greater use of renewable energy in drug manufacturing. Product-specific tactics may include reusing medical equipment and using more biodegradable packaging to reduce downstream supply chain emissions.