Reduce your emissions now—before you're forced to

By Miles Cottier, senior analyst, Advisory Board International

Health and Human Services' (HHS) pledge is the latest move from governments or regulators around the world that points to increased reporting of emissions and environmental footprints.

The pledge is voluntary, which means it's probably tempting for most organizations to do nothing. But in conversations I've had with cross-industry stakeholders all over the world, the growing notion is that governments will mandate emissions reporting from all enterprises before long. And if organizations wait until reporting is mandatory, it will make the path to reducing their emissions much harder.

Another thing I find particularly interesting about this "call to action" is that it isn't just health systems that are on the hook: suppliers and pharmaceutical companies are included, which deviates from the line the health system has often walked thus far. And it's a potentially powerful notion given that around 80% of the sector's emissions come from the supply chain.

The point is, HHS is saying here that the entire industry needs to take ownership of its contribution to climate change and do something about it. And that starts with reporting.

In fact, if we look at the UK's National Health Service (NHS)—often considered the world's leading health system when it comes to climate change and environmental sustainability—organizations already publicly report their emissions data because they have to. That was the first step. Now, all NHS organizations are mandated to publish their "green plans" for reaching net zero by the end of the year. What's more, new legislation will require all NHS buildings to adapt to climate impacts, protecting biodiversity within hospital estates, decarbonizing energy sources, and impacting the wider supply chain.

Climate reporting mandates will happen. And they will spur on significant industry-wide disruption that, if organizations are not ready for it, will challenge every aspect of their existence.

The NHS is far ahead of the United States health system in climate change mitigation, but HHS' latest move suggests it could be going down a similar path in the future. But for now, US health care organizations should sign up to the pledge because at the very least, it is good for their business.

Four major repercussions that increased reporting of emissions will cause

There are four major repercussions that increased reporting of emissions will cause, all of which will affect the reputation and financial viability of health care organizations.

1. Regulators will propose financial incentives to low-emitting organizations and leverage financial penalties on those that are high-emitting. This, added to the increasing cost of running an unsustainable business, will make it much more expensive to operate a health care enterprise.
2. 
   
3. Staff will leave to work for a more active employer with a better record of action against climate change. Increased reporting means increased employee awareness of an employer's poor emissions record. When given the choice between similar employers, potential recruits—especially millennials and Gen Z— will favor employers with a better climate change record.
4. 
   
5. Patients will opt for providers who take a stand against climate change. Patient loyalty is already waning and the negative impacts of a poor emissions record on consumer behavior will be increasingly felt when millennials and Gen Z become the dominant health care-using generations.
6. 
   
7. Socially conscious organizations will choose partners with a better climate change record. More progressive, socially active anchor organizations selectively partner with organizations that contribute to the health and wellbeing of the local population. High-emitting health care entities will struggle to build relationships with these organizations.

Essentially, disruptive change will happen to US health systems whether they like it or not. And the earlier they sign up to the pledge, the better off they (and the world) will be.