Healthcare and environmental sustainability are both essential to preserving human life. However, environmental sustainability pushes for less use of resources such as water and energy, which in turn can constrain healthcare without significant innovation in pharmaceuticals and diagnostics. Currently, the healthcare industry is responsible for producing millions of tons of greenhouse gas emissions, using millions of gallons of water, and generating tons of hazardous waste.
So at first glance sustainability and good healthcare may seem at cross-purposes given the potential trade-offs and conflicts. This being the case, a significant hurdle to a long term sustainable healthcare industry is how to instill environmental sustainability efficiently and effectively.
Sector-Specific Accounting Standards for the Healthcare Industry
Merging environmental sustainability with financial reporting is a good example of how the healthcare industry is working toward long-term sustainability. By using sector-specific sustainability accounting standards created by the Sustainability Accounting Standards Board (SASB), healthcare companies are able to quantify and monetize their sustainability efforts and environmental impacts, and disclose them as part of Securities and Exchange Commission (SEC) 10-K or 20-F filings.
These accounting standards make the intangible effects of sustainability measurable, and therefore, accountable and actionable. This makes it much easier for C-suite executives to make clear decisions supporting sustainability. According to SASB, healthcare companies who choose to apply these accounting standards in voluntarily disclosing their sustainability performance in their annual reports, are more likely able to be able to benchmark their accomplishments toward effective resource management. By using insights gained in preparing sustainability reports using SASB standards, companies in Biotechnology & Pharmaceutical and Medical Equipment & Supplies for example, will be able to directly tackle their challenges on energy, water, and waste efficiently and with economic integrity.
There is also a growing need for public disclosure of sustainability information by consumers and investors alike. Investors want to be able to review companies’ sustainability performance, while consumers want to know if the costs of healthcare are being properly addressed through better resource management. The transparency of healthcare companies regarding their sustainability performance can attract investors and new customers. Each can obtain a more holistic view of a companies’ performance by concurrently considering financial and sustainability materiality.
Innovating Healthcare with Sustainability
Healthcare companies with a firm grasp of their sustainability performance will also be poised to provide better products and services. One prime example of this is how environmental sustainability has pushed some pharmaceutical companies to improve their packaging’s lifecycles. By having improved product lifecycles, healthcare companies who innovate with sustainability in mind and are also able to become suppliers of choice primarily because they can bring costs lower while reducing their environmental footprint.
Innovation in the healthcare industry does not stop with product lifecycles. According to the SASB, continuous drive for sustainability in the healthcare industry will also give rise to better quality medications and improved treatments for ailments exacerbated by the changing environment. For example, healthcare providers are already having to prepare innovative treatments for aggravated respiratory ailments brought on by grave air pollution. Preventive treatments may gain even greater support since they not only reduce costs but can significantly reduce the resources needed to treat disease, thus improving both patient and industry bottom lines.
The Two-Fold Effect of Environmental Sustainability on the Healthcare Industry
The positive effects of environmental sustainability on the healthcare industry address both immediate and long-term needs. By incorporating insights from sustainability reports, healthcare businesses will be able to directly perceive effects such as improved efficiencies, reduced costs, increased capital, and higher revenues. Gradually, sustainability may help push healthcare companies to innovate their products and services to adapt to the pressures of an ever-changing environment.
By continuing to incorporate sustainability into the healthcare industry, goals that today appear to be at cross-purposes will eventually merge into compatible objectives, making way for a better quality of life for generations to come.
With the effective integration of consulting and software, FirstCarbon Solutions (FCS) has successfully helped healthcare companies succeed in their sustainability initiatives. For more information on how FCS can help your business become more sustainable, click on the button below:
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