{{item.videoDuration}}
{{item.title}}
{{item.text}}
{{item.videoDuration}}
{{item.title}}
{{item.text}}
Climate transition has emerged as one of the most pressing global issues of the 21st century — with July 2024 as the hottest global month on record. Additionally, hurricanes Helene and Milton were two of the most damaging hurricanes in recent history. As those impacted deal with the aftermath, there are a number of questions for how to handle the growing unpredictability and intensity of weather-related events and the impacts it has on the health and sustainability of our populations.
With healthcare organizations contributing significantly — approximately 8.5% — to greenhouse gas emissions in the US, the rise in global temperatures has led to more frequent and severe weather events, rising sea levels, melting polar ice caps and disruptions to ecosystems and biodiversity.
Climate transition introduces several risks to human health, spanning physical health (e.g., heat-related illness, air quality, vector-borne diseases), mental health (e.g., stress, anxiety), access to healthy food and nutrition, access to care, and more. However, healthcare organizations are not as far along on their sustainability journey relative to other industries, such as energy and transportation, that face immense regulatory pressures and perceived short-term impacts.
To understand how healthcare organizations are prioritizing and incorporating climate into their organizational strategies, including financial and business planning, PwC surveyed more than 200 healthcare executives across health plan/managed care organizations (MCO), providers, pharmaceutical/biotech (pharma), and medtech organizations. PwC’s US Healthcare Climate Survey uncovered how health industry leaders are responding to the increasing threat of climate transition and the health challenges that lie ahead.
Healthcare organizations’ response to climate and anticipated health challenges ahead
Key takeaways
Climate as a strategic priority: decarbonization, sustainable resources and supply chain
Ninety-nine percent of respondents indicate that climate strategy is a high or top priority for the next two years and 76% are incorporating at least one planning activity (e.g., strategic planning, financial planning) into their annual planning process. Across all healthcare sectors, the primary focus is on decarbonization, sustainable resources and supply chain, and reporting, largely driven by regulatory factors which includes responding to recent disclosure rules introduced by the SEC, California and the EU.
Eighty percent of organizations are implementing initiatives to reduce their carbon footprint and 78% are identifying ways to better manage sustainable resources such as solar energy, waste management and more. The focus on these areas may have the added benefit of Inflation Reduction Act (IRA) tax credits and incentives, as well as broader strategic efforts that organizations already have in place to digitize healthcare, reduce costs and improve health outcomes.
Responses vary between for-profits and non-profits
For-profit organizations are focusing on energy and supply chain efficiencies, with 50% exploring opportunities to leverage renewable energy sources and 47% prioritizing supply chain sustainability as a high priority.
Nonprofit organizations are more likely to focus on their environmental impact within the community, with 56% of nonprofits prioritizing collaboration with local organizations to invest in and support the community. Additionally, 43% of for-profit organizations recognize that implementing climate-related disclosure and creating transparency are a high priority.
Differences across the healthcare value chain
Healthcare organizations are responding to climate transition differently based on where they sit within the healthcare value chain, while recognizing the need to work together. Specifically:
- Pharma and medtech companies are more likely to focus their two-year strategy on incorporating sustainable resources (92% and 69%, respectively).
- Providers’ primary strategic focus is the use of sustainable supply chain practices (86%).
- Health plans/MCOs are more likely (75%) than the other sectors to indicate that one driver of their strategy is the impact on total cost of care due to climate-related events and illness (e.g., air pollution, mental health, etc.)
Take down the siloes
Healthcare leaders recognize they should not operate in siloes. For example, a healthcare provider can procure sustainable products only to the extent that these products exist and meet their quality, cost and medical standards. In some cases, working with upstream groups, such as industrial launderers, is key to creating an efficient, cost-effective, closed-loop system of reusable textiles.
Healthcare organizations are developing strategic relationships to better understand and address the needs of the populations they serve. Seventy-seven (77%) percent of pharma and medtech companies, 63% of health plan / MCOs and 69% of providers view collaboration with stakeholders across sectors as a key priority to address climate transition and to achieve their sustainability goals. Investing in and supporting communities through collaboration with stakeholders is also a high priority, managing climate impacts at the local level.
Investing in and supporting the local community through collaboration with local stakeholders is a high priority, managing climate impacts at the local level.
The disconnect between climate concerns and actions
While organizations are focusing their strategic efforts largely on decarbonization, reporting and sustainable resources, executives believe climate transition can have an impact on human health, including physical, mental and spiritual well-being.
Key areas where executives expect to see high to very high impact from climate transition include:
- Physical health risks related to acute and chronic illness (59%) and extreme weather (58%)
- Impact to access to care due to disruption in care (58%)
- Increased focus on long-term outcomes to reduce inequities across communities (58%)
While 74% of leaders say their climate strategy is driven largely by customers’ mental health and well-being, their actions to date suggest otherwise. This is an opportunity for health industries to shift the tone beyond decarbonization and net-zero efforts alone to focus on human health and well-being to prepare for the impacts across various sectors.
Implementing climate initiatives: confronting constraints
Numerous other constraints exist in implementing climate initiatives including:
- Financial support: 56% of organizations say securing sufficient funding is a major obstacle in delivering their climate strategy in the next two years.
- Regulatory requirements: 56% of organizations, particularly medtech and pharma, indicate the evolving regulatory landscape can be complex and time-consuming.
- Return on investment (ROI): 47% of respondents across all sectors indicate that realizing returns on climate-friendly investments impacts their ability to secure funding and stakeholder buy-in.
- Data collection: Approximately half (49%) of respondents across all sectors identified gathering, integrating and reporting appropriate data as a key barrier to driving effective climate strategies, especially as regulators move towards requiring ESG data disclosures.
- Stakeholder buy-in: Pushback from stakeholders to implement sustainable practices is a particular challenge for nonprofit organizations, which hinders the availability of resources for executing climate transition goals.
A call to action for health industries
Healthcare organizations can play a critical role in mitigating the negative effects climate transition may have on human health and contribute to a sustainable future, with their unique and powerful role in supporting human health. While it is admirable that healthcare organizations are prioritizing climate in their planning activities, our Decarbonization Strategic Plan findings show that 10 out of 11 industry sectors, including healthcare, are off track to meet net zero given current execution plans. To avoid these pitfalls, organizations can be intentional and targeted in addressing climate transition to have a consequential impact on the populations served. There is a significant opportunity, both individually and through business relationships, to come together and contribute to a healthier and cleaner world. To do so, organizations should think beyond decarbonization and reporting (while continuing these efforts) and look at the physical and clinical impacts of climate on the local communities they serve.
- What are the climate risks (acute and chronic) we face?
- What risks do physical and mental health pose to our patients, members and communities?
- How can the populations we serve be impacted?
- How are we prepared to respond to a climate-related event? Are our employees prepared?
- How are we supporting your community? Our employees?
- What business relationships / partnerships do we need to be successful?
This is about more than just climate — this is about how the healthcare community is addressing the growing challenges that our businesses and communities are faced with in response to climate change. It is the responsibility of healthcare organizations to be prepared and vigilant to aid in minimizing the impacts on human health.
With our extensive expertise in health industries and climate strategy, PwC is well-equipped to help you answer these questions and assist you in addressing your climate-related challenges.
Health industries and climate - sector insights
A closer look at leaders’ views, challenges and actions to move forward by sector
About the survey
Between April 16 and May 20, 2024, PwC received 209 survey responses from US healthcare executives on topics related to their organization’s climate strategy and response to climate transition. Respondents are from companies that have at least $500 million in revenue and 87% of respondents follow a for-profit business structure, while 13% are nonprofit organizations. Respondents operate across a range of healthcare sectors, including health plan/managed care organization (27%), healthcare provider/hospital system/integrated delivery network (31%), medtech (19%), pharmaceutical/biotech (23%).
{{filterContent.facetedTitle}}
{{contentList.loadingText}}
{{contentList.loadingText}}
Follow us
