Decarbonizing the Health Care Value Chain: A Call to Health Care Manufacturer, Distributor, and Industry Organizations
I. Background
Climate change poses serious risks to human health, exacerbating existing health threats and creating new public health challenges. Health impacts are being felt across the United States, from respiratory conditions due to increased wildfires and extreme heat events, leading to a greater number of days with poor air quality (an AQI value greater than 100), to the rise of vector-borne diseases (VBDs) carried by mosquitoes (e.g. West Nile Virus) and ticks (e.g. Lyme Disease), which are spreading with higher cumulative growing degree days, lower cumulative precipitation, and lower saturation deficit.ÌýÌý
refers to the full life cycle of a product or process, including material sourcing, production, transport, use, recovery and recycling, and disposal.
Coupled with the development of effective strategies for adapting to physical climate change impacts, the health care sector can greatly benefit from the identification and execution of effective, impactful, long-lasting systemic changes to decarbonize its value chain.Ìý
II. Call to Action to Health Care Manufacturers, Distributors, and GPOs
Health care manufacturers, distributors, and GPOs should consider the following actions to decarbonize:ÌýÌý
1. Prioritize, as a corporation and/or board, the goal of decarbonizing the health care value chain. Empower sourcing leads to establish purchasing goals and targets that incorporate sustainability into broader business plans.Ìý
a. Ensure sustainable procurement is integrated into the organization’s annual strategic business plan with goals that are specific, measurable, achievable, relevant, and time-bound (SMART) and/or purposeful, actionable, continuous, and trackable (PACT).Ìý
b. Develop and institutionalize a sustainable purchasing policy that targets specific sourcing practices and establishes improvement metrics that are relevant to the organization within a dedicated timeframe. For example:Ìý
i. Establish a percentage goal of vendors that inventory their GHG emissions, establish emissions reduction targets, report on progress toward these targets, and actively reduce or have a plan in place to reduce their emissions. Focus initially on Scope 1 and 2 emissions, then expand to Scope 3 emissions.Ìý
ii. Include sustainability metrics as key performance indicators (KPIs) tied to vendor selection criteria, business reviews, and contracts.Ìý
iii. Identify vendors that have aligned sustainability priorities to further develop partnerships.Ìý
c. Integrate sustainability into value chain decision-making throughout broader enterprise governance structures (e.g., medical executive committees, operations leadership councils, value analysis, strategic and capital planning) to embed a focus on the environment.Ìý
d. : Kaiser Permanente has achieved significant success through a partnership between its supply chain and sustainability teams that evaluates all purchases against a defined set of Environmentally Preferred principles and ensures that the life-cycle impacts of all purchased goods and services are understood.
2.ÌýEstablish a goal of reducing organizational GHG emissions byÌýÌýand achievingÌýzeroÌýemissionsÌýby 2050 whileÌýdesignatingÌýan executive-level lead for this work.Ìý
a.: As ofÌýMarchÌý2024,ÌýoverÌý130Ìýorganizations across the United States have signed the U.S. Department of Health and Human Services’ (HHS)Ìý,Ìýa commitment which aligns withÌýtheÌýabove goal.Ìý
b. Medtronic has reduced its organizational GHG emissions by 35% since 2020, targeting a 50% reduction by 2025, and has set a goal to achieve carbon neutrality within its global operations by 2030, and net zero across its supply chain by 2045. Additionally, at the beginning of 2024 the Company appointed its first Chief Sustainability Officer to lead this work.Ìý
3. Participate in relevant industry coalitions to collaborate, build consensus, and take informed and strategic action on decarbonizing the health care value chain. There are ongoing initiatives focused on peer-to-peer learning and knowledge sharing, such as various industry-led collaborations and partnerships, which aim to address environmental impacts across operational and supply chain activities.ÌýÌý
a.ÌýCaseÌýStudy:ÌýNAMÌýAction Collaborative on DecarbonizingÌýthe U.S. Health SectorÌýisÌýanÌýinitiativeÌýcomprisedÌýof health care providers,Ìýfederal agencies,Ìýsuppliers, groupÌýpurchasingÌýorganizations, and non-governmental organizationsÌýworkingÌýto reduce GHG emissions across the health care value chain.Ìý
4.ÌýLeverage NAMÌýresourcesÌýforÌýstrategicÌýguidance. The NAMÌýSustainability Journey Map & Resource RepositoryÌýis a pivotal resource designed explicitly for health care manufacturers, distributors, and GPOs aiming to catalyze their efforts in decarbonizing the health care value chain. This comprehensive and interactive tool offers strategic insights and actionable steps across distinct stages of the sustainability journey.
a. Navigate the Journey Map to strategize and implement sustainable practices across the health care value chain, guiding decision-making and fostering resilience.
b.ÌýDetermine the actions to take and challenges to overcome at each step, utilizing the identified resources within the stages to accomplish these.
III. Conclusion
There is an urgency for health care CEOs to dramatically reduce their businesses’ value chain emissions and associated environmental impacts. Collaboration across the industry and sector is imperative to mitigate the human and environmental health threats posed to current and future patient populations by climate change. Alignment around key action items will ensure a transition to a healthier, safer, and cleaner health care sector that upholds its commitment to do no harm.
Disclaimer: This document was prepared byÌýRobert Ellsworth (Medtronic), Cristina Indiveri (Vizient), and Kim Makurat (Medtronic) whoÌýareÌýmembersÌýof theÌýSupply ChainÌýWorking Group of the NAM Action Collaborative on Decarbonizing the Health Care Sector; and reviewed by members of the Action Collaborative. Statements in this document do not necessarily reflect the views of all members of the Action Collaborative; the NAM; or the National Academies of Sciences, Engineering, and Medicine (NASEM). The document is intended to help inform and stimulate discussion. It is not a report of the NAM or the NASEM. Copyright by the Â鶹´«Ã½×ÊÔ´. All rights reserved.
The funding support extended by the NAM Climate Collaborative’s sponsors makes work like this possible. See full list of sponsors.Ìý