Greening & Sustainability In health care and life sciences: Implementing a strategic response

Deloitte

Description

The report explores leading practices of companies in several industries where greening efforts are mature, and compares and contrasts them with efforts of health care organizations. Six impact zones based on the leading practices of these companies provide a comprehensive framework for a health care organization’s greening initiatives.

Sujets

• Health

Informations

• Publié par: deloitte
• Nombre de lectures: 161
• Langue: English

Extrait

Greening and Sustainability in Health Care and Life Sciences 

 Implementing a Strategic Response

Produced by the Deloitte Center for Health Solutions

Greening and Sustainability in Health Care and Life Sciences Foreword Greening is a significant trend that is destined to impact each of the health care industry’s major sectors. It is an imperative that will only grow in importance. Greening concerns more than providing an environmentally safe work environment for employees and promoting responsible business practices among suppliers who contribute to value chains. It is a fundamentally different way to lead and operate an organization. The term “greening” is sometimes used synonymously with sustainability. We believe the two are complementary but distinct: Greening includes those policies, procedures, programs and investments built into an organization’s business practices that promote, as well as contribute to, a safe, Sustainability healthy and ecologically efficient environment for the benefit of their employees, customers, vendors, and local communities – effectively, it is the environmental sustainability of the organization. Greening a C d u  l V tu al r u e esn Greening practices represent a wide array of practices and policies, such as the procurement and delivery of environmentally safe products and services, the promotion of energy and natural resource efficiency, the reduction of waste and pollution, improvements to hazardous waste disposal, and the greening of an © 2008 Deloitte Development LLC. All rights reserved. organization’s workplace and customer environments. Sustainability includes greening and a second dimension: the beliefs, values and codes of conduct of the organization, reflected in the organization’s relationships to its community, employees, industry and competition. Sustainability, in many ways, is about the ethos of the organization – the written and unwritten standards by which decisions are made. Greening refers to a distinct set of those decisions focused on environmentally safe and appropriate business processes. This analysis by the Deloitte Center for Health Solutions, part of Deloitte LLP, 1  offers one view of greening in the health care industry. Based on our experience and observations, there is a business case for “ i ” – health care organizations can achieve both business and social value through greeninggo ng green initiatives. Further, we believe that every health care organization will be held accountable for its greening efforts, and that greening is congruent with the missions of health care organizations to improve the health and well-being of our communities, and to contribute appropriately and favorably to a healthy culture and value system. We also believe that greening efforts in health care organizations are appropriate and necessary for two reasons: they are good business and they are the right thing to do for our employees and communities. This analysis offers a framework for considering an organization’s response to what we consider will be a major focus for our industry in years to come.

Paul H. Keckley, Ph.D. Executive Director Deloitte Center for Health Solutions

1  As used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

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Greening and Sustainability in Health Care and Life Sciences

Greening: Fad or Trend? Greening is not a fad; it is a long-term trend that will require every health care organization to invest strategically and programmatically to conserve natural resources and create a healthy environment for customers, patients and employees.   For many industries, greening has been a longstanding challenge: automakers and air pollution, chemical manufacturers and waste disposal, power generation plants and air quality. These are just a few of the issues that have generated public concern and produced regulatory oversight that institutionalized programs to green these organizations and protect the communities in which they operate.

So what’s different now? In recent years, greening efforts have expanded in scope due to numerous factors. Among them: • Increased media attention – Recent greening cover stories have appeared inThe Wall Street Journal, the Economist, Newsweek,   and other major publications. • Increased consumer interest – In surveys linking corporate reputation to greening, 17 percent of consumers today are “green motivated,” 2  and more than 24 percent of shareholder proposals in 2008 are “green-related.” 3 • Increased attention to supplier relationships – More companies sourcing suppliers are insuring they operate in a green-responsible way.  Increased regulatory scrutiny – Attention to water usage,• carbon emissions, product composition (nanotechnology, hazardous materials), labeling, and performance reporting is increasing. There has been a 300 percent increase in the number of proposed climate change bills compared to five years ago; 4  water usage and product and packaging labeling are entering as the next wave of regulatory focus. • Increased scientific focus on green solutions – Growing consensus within the scientific community is linking human activities to climate change and recognizing that natural resources and our ability to access them are finite. Concurrently, increased analytic rigor is linking socially responsible business practices with bottom-line performance. • Increased access to capital for greening efforts – Institutional investors and private capital have flocked to green solution start-ups in recent months. So where is the health care and life sciences industry relative to the greening trend? How are hospitals and facility-based providers, health plans and other payors, and life sciences companies implementing green strategies within their value chains? Is greening in health care and life sciences ahead of, behind, or completely oblivious to the greening trend in corporate America? This paper explores leading practices of companies across several industries where greening efforts are mature, and compares and contrasts them with efforts of health care organizations. The intent of this review is to explore areas where health care stakeholders and overseers might assess greening efforts and to offer a strategic framework for monitoring these efforts within each group.

2  Natural Marketing Institute 2006 3  Shareholder proposals were found in a database compiled by Interfaith Center for Corporate Responsibility, http://www.iccr.org/ethvest.php 4  Ibid 3

Greening and Sustainability in Health Care and Life Sciences

In this analysis, health care organizations are categorized into four major groups: 1.Providers that are directly involved in patient care, usually originating services from a health care facility (e.g., hospitals, labs, diagnostic imaging facilities, surgery centers, medical offices). 2.Health plans, other payors, and employers that are the primary purchasers of health services and that leverage their influence on the behaviors of providers and enrollees (e.g., commercial insurance, long-term care insurance, Medicare, Medicaid, employer-sponsored insurance). 3.Life sciences companies, including pharmaceutical, biotechnology and medical device companies, which manufacture and sell diagnostic and therapeutic compounds and devices to providers and consumers. 4.Regulators at the community, state and national levels that oversee greening efforts and establish codes of conduct for greening practices. Key Insights in this Analysis 5 •Carpe Diem… Greening in the health care industry is still evolving. There is a very real opportunity to seize a leadership position in greening that enhances overall business advantage and improves patient care.  Going “green” is a long-term commitment… Leaders in• greening understand the compelling financial, regulatory, risk mitigation, broader marketplace, and community health status improvement opportunities inherent in evolving their health care business models. Greening is a journey. •Greening is not an option… Greening is a critical business issue that is quickly becoming a requirement. Unlike other business issues, sustainability is being shaped by drivers outside of the health care industry’s control. Multiple stakeholders – shareholders, regulators, health consumers, and others across the health care system – are demanding that companies address sustainability, which indicates that this issue will be with the industry, and all industries, for years to come.  Transformative Business Model Innovation is Required…• Leading companies realize that truly green business models are fundamentally different, have far-reaching implications and are not merely incremental to today’s health care operations. •Be Careful of Unintended Consequences… Well-intentioned greening programs may lead to net negative outcomes. Thoughtful consideration and a broader lifecycle perspective are necessary to understand the full impact of green initiatives throughout an organization’s value chain, as well as their ultimate impact on the patient. •Ad-Hoc Will Not Do the Trick… Leading companies address greening through a disciplined and structured approach. This approach starts with strategic alignment at the top, evaluates the operational implications of greening strategies, drives collaboration across the value chain, and develops governance and control structures to guide and measure progress.

Defining “Greening” within Sustainability Consistent with the U.N./Brundtland Commission definition, we have developed a working definition of sustainability as“The continual improvement of business operations to ensure long-term resource availability through environmental, socially sensitive, and transparent performance as it relates to health consumers, business partners, and the community.” Figure 1 highlights major environmental, social, and economic programs within the scope of sustainability. These are consistent with the Global Reporting Initiative (GRI) 6  Reporting Framework. Figure 1: Types of Sustainability Programs Environmental Social   Economic   programs programs programs • Energy  • Fair trade • Accountability/ • Water  • Local economic  transparency • Emissions development• Corporate • Waste reduction  • Working  governance conditions • Shareholder value • Recycling  • Health/nutrition • Economic • Re-use • Diversity  performance  • uma Forestry •Hnrights • o Fi b n j a ec n t c i i v al e  s • O A r g g ri a c n u i l c t  u f r o e o / ds •Faircompetition • Livestock  • Anti-corruption and bribery • Packaging  • Safety  • Product content  • Social  • Biodiversity philanthropy • Other environmental © 2008 Deloitte Development LLC. All rights reserved. Within the broad scope of sustainability, certain efforts focus on the specifics of greening – programs, policies and procedures that help achieve and maintain an environmentally-friendly environment that is safe for an organization’s employees, customers, vendors and suppliers. Many of these programs are listed in the environmental column above, but some are directly linked to social and economic programs as well; therefore, a broad view of greening is required to help identify cross-industry practices.

5  Adapted from the Deloitte publication,Sustainability: Balancing Opportunity and Risk in the Consumer Products Industry, June 2007 6  The Global Reporting Initiative is a framework for reporting economic, environmental, and social performance. GRI aims to make sustainability reporting by all organizations as routine and comparable as financial reporting. 4

Greening and Sustainability in Health Care and Life Sciences

Greening and Sustainability: Lessons from Other Industries Organizations which are effective in their greening efforts dedicate resources and monitor adherence to policies, procedures, programs, business practices and relationships that reflect deliberate improvements across each dimension. Can lessons and leading practices from top performers in other industries be applied to health care organizations? We believe they can. Case analysis of the Top Ten leaders in the Dow Jones Sustainability Index (Figure 2) suggests that an organization’s effectiveness in greening requires proactive, programmatic efforts that cut across every layer of the organization.These efforts are top-down and bottom-up; they are planned and spontaneous; they are constantly reviewed and consistently expanded. Figure 2: Industry Leaders in Sustainability Efforts Top Ten Holdings in the Dow Jones SustainabilityLink to Sustainability Efforts Index North America (DJSI NA) E G l e ec n t e r r ic a  l C   o. http://www.ge.com/company/citizenship/index.html M ht ft.com/About/ icrosoft Corp. Co t r p p :/ o / r w at w e w Ci . t m iz ic e r n o s s h o ip/US/default.mspx Procter & Gamblehttp://www.pg.com/company/our_commitment/ Co.sustainability.jhtml ttp://www.chevron.com/globalissues/ Chevron Corp. c h orporateresponsibility/2007/ Johnso o n n  & http://www.jnj.com/connect/cari g/ Johns n International Businesshttp://www.ibm.com/ibm/environment/ Machines Corp. Cisco Systemshttp://www.cisco.com/web/about/citizenship/index. Corp.html Pfizer Inc.http://www.pfizer.com/responsibility/ Citigroup Inc. http://www.citigroup.com/citigroup/citizen/index. htm Intel Corp. s h u tt s- p u :/ s / a w .p w d w f .corporateregister.com/a10723/intel07- Source: The Dow Jones Sustainability Index North America (DJSI NA) includes companies selected according to a systematic corporate sustainability assessment that identifies sustainability leaders in   58 industry sectors. The underlying index methodology accounts for general as well as industry-specific sustainability trends and evaluates corporations based on a variety of criteria including climate change strategies, energy consumption, human resources development, knowledge management, stakeholder relations and corporate governance.

ov/index.cfm?c=healthcare.bus healthcare biz case 7  http://www.energystar.g _ _ _ 8  All information sourced from http://ge.ecomagination.com/site/index.html, July 2008 5

Each of the top-ten companies on the Dow Jones Sustainability Index is a stalwart of industry. Each could make the case to investors that while their greening efforts began as regulatory compliance measures, they have now morphed into value-generators. Specific ROI data on greening investments is still emerging, but organizations like the EPA have developed a model that indicates that investment in greening can increase earnings per share; 7  also, the emergence of carbon markets presents opportunities for green organizations to sell carbon offset credits as a new revenue stream.Beyond EPS and ROI, however, these organizations share a common attribute: to them, greening is about achieving business value and doing the “right” things for the sake of the doing right things – things that are both practical for their business and beneficial to society and the environment as a whole. Justification is neither financial nor circumstantial. Greening is thoughtful, proactive, long-term strategic initiative premised on a commonly-shared value –   companies are obligated to protect resources…to leave the planet a better place…to provide a work environment free of environmental hazards and waste…to replenish natural resources and improve the quality of life for the citizens of the community in which it operates. These companies are investing in their own unique roadmaps to greening and sustainability, often venturing into applications and solutions not previously considered or, in some cases, expected by customers or value-chain participants. In many ways, these efforts are a window into the ethos of each organization – what matters to its leaders…what constitutes business success…how the world is a better place because the company pursues a greater good. No doubt, greening is good business; however, the returns are often long-term and, in some cases, customers are simply unaware or insensitive to a company’s greening efforts. It is, nonetheless, a strategic foundation upon which many industry leaders are betting their future. Case in Point: GE’s Ecomagination 8 As one of the largest companies in the U.S., General Electric Co. (GE) is a pioneer in sustainability, driving such initiatives as far back as the 1970s. GE illustrates the value that sustainability and greening can generate for a corporation when they are viewed as a business opportunity, a chance to increase profits. In 2005, GE launched its “Ecomagination” campaign, a vision and commitment to harness the company’s products and services to address the world’s pressing environmental issues. To make Ecomagination truly sustainable from a business perspective, GE set measurable performance targets at the campaign’s inception; the Board of Directors has ultimate responsibility for the initiative and its outcomes. GE based its Ecomagination strategy on several commitments: • Double the investment in green R&D by increasing research funding for cleaner technologies from $700 million in 2005 to $1.5 billion in 2010. • Increase revenues generated from Ecomagination products to at least $20 billion in 2010, with more aggressive targets thereafter. • Reduce greenhouse gas (GHG) emissions and improve the energy efficiency of GE’s operations. The company committed to reduce GHG emissions one percent by 2012 and to improve energy efficiency 30 percent by the end of 2012 (all compared to 2004).

Greening and Sustainability in Health Care and Life Sciences

GE also established several mechanisms to track the commitmentsChevron 11 made through its Ecomagination strategy:• Chevron developed an approach to managing its greening efforts in 2001, within a broader agenda of corporate responsibility. Through • GE uses its annual Citizenship Report, Ecomagination report, webthese efforts, the company has improved its energy efficiency by site and advertising to keep the public informed of its initiatives. 27 percent of 1992 levels, driving improvements in greenhouse gas  • GE’s Citizenship Report covers the company’s worldwide e En m v i i s r s o io n n m s. e   n A t l , s   o S   o p c a i r a t l    a of n  t d  h H e e  g al r t e h e  I n  m a p g a e c n t  d A a  s f s o e r s   s C m h e e n v t r   o (E n  S is H   I a A  r ), e   c w e h n i t c   h  sustainability initiatives, goals, results and metrics. examines the impact that projects will have on the environment, • The Public Responsibilities Committee, which is part of GE’s Board biodiversity in local regions, and social and health aspects of local of Directors, has ultimate oversight for all citizenship, sustainability  communities, as well as the health and safety of Chevron employees. and green initiatives.  The ESHIA has been mandated for all new capital projects as of 2007. • Senior GE officers are regularly involved in reviewing corporate Cisco 12 citizenship priorities, through the Citizenship Executive Advisory Council (CEA). The CEA is comprised of the SVP and General • Cisco drives end-to-end environmental responsibility throughout Counsel, VP of Corporate Citizenship, VP of Environmental  i a ts n   d s   u s p o p l l d y  i  c n  h a a   i s n o  t ci o a   l e ly n   sure  o th n a i t b   l a e ll     m pr a o n d n u e c r t .  s  G c i a v n e   n b  t e h  s a o t  u t r h c e e   d c , o  b m u p il a t  Programs, VP of Ecomagination, and the Executive Director of  resp s ny Corporate Communications. c o h u a t i s n o   u a r g c e e n s  d 9 a 5     a p n e d r   c w en o t r   k o s f    i w t i s t   h m  i a ts n   u p f a a rt ct n u e r r i s n  t g o ,   r C e is d c u o c   e h   a c s a   r a b   o gr n e  f e o n sup i p n l t y ,    • In 2006, the company introduced a Stakeholder Review Panel energy useand availability, water usage, availability and quality o , t  l p a r nd    that is tasked with overseeing the quality of the reporting in the  ste mana ement and hazardous was Citizenship Report.  use and wa g te management. iti Ecomagination has been so successful that in 2007, GE raised its annual C • In g  r 2 o 00 u 2 p , 1  3 Citigroup (Citi) launched a comprehensive process to track, Ecomagination revenue target for 2010 from $20 billion to $25 billion.  report, and manage its environmental footprint performance. Taking a whole-organization approach, Citi launched a web-based global Other Companies Striving for Greening Success env r i f r o o r n m m a e n n c t e a   l d   a d t a a t , a  a b n as d e  t   r t a o i   n se e r d v  f e  a a ci s l   it a i   e r s e   p m o a si n to a r g y e   r f s o   r  w it o s r   l e d n w vi i r d o e n  t m o  e u n s t e a   l  e Other multi-nationals have paralleled GE in launching aggressive and  t p he database to track the performance of its buildings over the course  noteworthy greening and sustainability programs. Examples include:  of the year. This process involved over 400 employees and 14,000 ro Microsoft 9 p mor p e e   r t t h ies, and encompa . s   s A e s d ov t e   r o   f 9  t 0  hi million square feet of space in   Microsoft created a Chief Environmental Strategist position to drive reduce it a s n     g 1 lo 0 b 0  a c l  o e u m n i t s r s i i e o s ns b   y p  1 ar 0 perce s n   t i   n o i f ti   a 2 t 0 iv 0 e 5 ,   l C e i v ti e   l i s s    s b t y r   iv 2 i 0 n 1 g 1  to  • . improved environmental sustainability within its organization, with clients and through worldwide partnerships. • T p o u  r f c u h rther s    r o e f d  g u r c e e e  i n t   s p c o a w rb e o r. n I  n f   o 2 o 0 t 0 pr 5 i , n   t C , i  t C i it p i u a r l c s h o a  s m e a d k  1 es 0  , s 4 ig 7 n 8 i   fi M ca W nt h   ofase • Internally, Microsoft has initiated green programs such as employee certified re lectric bus transportation, which has eliminated nearly 25,000 miles of car  l  g en e power, and in 2006 purchased 52,283 MWh traffic per day for its employees and reduced the company’s overall  global y. carbon footprint. Intel 14 • Externally, Microsoft is improving the energy utilization of its products  • Intel is number one of the National Top 25 Green Power Purchasers such as Windows Vista and Windows Server 2008, thus extending its  recognized by the EPA. It has purchased 1,302,040,000 kilowatt impact to consumers’ energy utilization and environmental footprints.  hours (kWh) of green power (46 percent of its total electricity use) from biomass, geothermal, solar, and wind sources. Procter & Gamble 10 rocess  • As part of Proctor & Gamble’s (P&G) ongoing commitment to product  • I c n o  2 m 0 p 0 a 7 n , y  I ’s n   t 4 e 5 l n sh m if   t H e i- d k  t   o m  a e  t l a e l a g d a -f t r e e  s e i  li m co a n n   u t f e a c c h t n u o ri l n o g g  y p for the . safety, all products undergo an environmental risk assessment related to “fate research,” or determining where a product goes in the environment after use, and how much goes there. In combination with the fate research, P&G also examines the impact that product ingredients will have on organisms in the environment. All P&G ingredients must pass the environmental risk assessment before they are distributed to the market.

9  All information sourced from http://www.microsoft.com/environment/, August 2008 10  All information sourced from http://www.pg.com/company/our_commitment/environment.shtml, August 2008 11  All information sourced from http://www.chevron.com/globalissues/corporateresponsibility/2007/, August 2008 12  All information sourced from http://www.cisco.com/web/about/citizenship/environment/index.html, August 2008 13  All information sourced from http://www.citigroup.com/citi/environment/index.htm, August 2008 14  All information sourced from http://www.intel.com/intel/environment/index.htm?iid=gg_about+intel_environment, August 2008 6

Greening and Sustainability in Health Care and Life Sciences

What Can Be Learned From Other Industries? Zone 3: Workforce– Have health human resource strategies been re-examined for the impact that going green will have on the Each of the companies cited above is methodically expanding its  workforce? Have new work models been considered to increase the greening efforts. In addition, each is careful about exploiting these  lo efforts for their public relations value. Rather, the companies inform  number of employees working from home? Are emp yees trained on green strategies and empowered to drive green initiatives? their employees and suppliers to align to an overarching greening strategy that achieves both business and social value. Zone 4: Technology– Has a comprehensive assessment of the existing technology’s energy use and footprint been completed? The efforts, successes and, in some cases, tough lessons learned by  Does the organization’s equipment and technology base maximize these industry champions and others provide a useful framework for  r technolo health care and life sciences organizations to gauge their greening  e e x q is u t i i p n m g  e g nt e   e o n r    technolog gi y e  a s c ?  q Is u   i t si h t e i   o e n n s  vi c r o o n n si m d e e n re ta d l    i a m nd p   a a c li t g  o n f e  n d  ew  efforts and plans. In our view, greening requires planning, investment  within an overall green strategy and business case? and execution in six impact zones (Figure 3): Zone 5: Products and Services – Does the r anization in Each of the six impact zones is distinct; together they provide a  o g tegrate comprehensive framework for an organization’s greening effort.  green a i t n io g into service delivery from facility design to front-line staff  To begin, an organization should assess its greening by answering  o di perns? Has a comprehensive assessment of product usage a   l and    some key questions: su s p p p o li s e a s l    ( a e n . d g   ., d   e d v r i u c g e s s , ,     b o l f o fi o ce d     s a u n p d p  t l i i s e s s  u a e n  p d r   o e d q u ui c p ts m ,  e m n e t) d   i b c e al e / n s   u c r o gi m c pleted  oot rint? Do the Board a Zone 1: Governance– Do the Board and senior management  t m o  a u n n a d g e e rs m t e a n n t d     k t n h o e  w o   r h g o a w ni   z c a o ti n o s n u ’s m  f er wi p llingness to pay might n   d b   e s   enior  adequately support and appropriately evaluate the organization’s  in i g n r   e p e la n c in e  g a   n ef d f   o u r n ts d ? e  I r s s   t a o   o co d  m th p r r o e u h g e h ns o i u v t e     t b h otto rg m a - n u i p z , a   t t i o o p n - ? d   o W w h n a   t s   t s r t a e t p e s g   y  i s m er p vi a c c e t s e ? d     H w a h s  e t n h   e t   h o e r   g c a os n t i s z   a o t f i   o g n r   e a e s n s i e n ss g e  a d r   e t   h r e e   fl b e r c a t n e d d     equ p i r ty o   d o u f  c a t   s  g a re n e d  n  e o  healing environment? are being taken to address increasing patient, shareholder and other stakeholder concerns related to sustainability? Zone 6: Supply Chain– Does senior management know the Zone 2: Workplace – How h of the organization’s energy is green  magnitude of potential for a green shift in t a h ni e z   a products and services  muc supplied  to the organization? Does the energy? Do the Board and senior management know the carbon  to drive supplier improvements to its sup o p r l g y chai t n i   o f n o   o h t a p v ri e n   t a ?  s   trategy  footprint of the organization throughout the life cycles of its buildings,  D oduct standardization committees across the clinical and vehicles and equipment? Are green standards such as energy and  no o n   - p c r linical domains have clear evaluation criteria that consider  water use and re-capture, renewable materials and maximizing natural  nd nt arm of the light in place to optimize facility designs? p o r r o g d a u ni c z t a s’ t   i g o r n e   e e n m  i p m o p w a e c r t e ? d  I   s t   o t   h d e r   i s v o e  u g rc r i e n e g n     a deci   s p i r o o n c s u ? reme Greening across all six zones requires bottom-up, top-down, enterprise-wide decisions with an eye toward doing right things the right way the first time.

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Figure 3: Greening Impact Zones Effectively greening an organization requires integrated, enterprise-wide implementation of the policies, procedures,   programs, services, structures, operating models and leadership in the six impact zones, across an organization’s value chain.

GovernanceWorkplaceWorkforceTech Prod n u d cts S C u h pp i l n y nology a   a Services

Wholly Sustainable Enterprise – a company that generates growth, profitability and  value by applying principles of sustainability across the entire base of activity (Deloitte definition)

© 2008 Deloitte Development LLC. All rights reserved.