Achieving net-zero across the healthcare supply chain

The healthcare industry, just like many others, is not spared the adverse consequences of climate change. Climate change presents both a risk and an opportunity for the healthcare industry.

To begin with, industry players have to reimagine the future, considering aspects such as the use of technology such as AI (artificial intelligence), integrating sustainability into their supply chains and embracing a circular economy, attracting and retaining the right talent, redefining patient care and experience, adopting new funding models and structures, navigating a complex regulatory environment and collaborating with other players across the industry.

These areas within the industry provide opportunities for growth and efficiency through innovation. The healthcare industry contributes about five percent of the total global greenhouse gas (GHG) emissions, and it is also clear that climate change will result in health crises, which the healthcare industry will also have to resolve.

Therefore, climate change will significantly impact public health in the healthcare industry. Hence, reducing GHG emissions remains the most effective means of addressing the sustainability challenge. Some of the areas to tackle to achieve this include the following:

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From a scope 1 GHG emissions (direct) perspective, reporting organisations in the healthcare industry should consider reducing emissions from their facilities, including their owned vehicles. For scope 2 GHG emissions (indirect-purchased emissions), the reporting organisation has to consider the reduction of emissions from purchased electricity, steam, heating and cooling for their own use.

For scope 3 GHG emissions (indirect - from assets not owned or controlled by the reporting organisation, within the value chain), reporting organisations should aim to reduce emissions from upstream and downstream activities.

Upstream activities range from raw material extraction to transportation, manufacturing, and product delivery, while downstream activities range from product usage to end-of-life treatment and waste disposal.

Upstream activities include leased assets, business travel, transportation and distribution, capital goods, purchased goods and services, employee commute, waste generated from operations, and fuel and energy-related activities.

Downstream scope three activities to consider include franchises, investments, leased assets, use of sold products, transportation and distribution, processing of sold products and end-of-life treatment of sold products. The healthcare industry can also leverage technology systems for data gathering and reporting, including the adoption of AI to drive their sustainability agenda.

Akinyemi Awodumila is a Partner at Deloitte East Africa. He is an author who writes and speaks widely on corporate reporting topics.