Healthcare's Rising Carbon Footprint

As the climate clock goes on ticking, countries are preparing their healthcare infrastructures to deal with the greatest public health challenge of the modern age. According to the World Health Organisation (WHO) climate change is the biggest threat facing humanity, affecting clean air, safe drinking water, sufficient food and safe shelter. It is expected that climate change will lead to an additional 2,50,000 people dying every year between 2030 to 2050 from malnutrition, malaria, diarrhoea and heat stress.

While the healthcare providers and governments prepare for the climate crisis they should also remember "First Do No Harm", a healthcare principle taught in medical schools which means refraining from doing any harm first before doing any good while providing care. The same principle experts say should now apply to the carbon emissions that the healthcare sector produces every year.

According to a 2019 report by Health Care Without Harm (HCWH), the global healthcare sector's climate footprint is equivalent to 4.4 per cent of global net emissions, contributing around 2 gigatonnes of carbon dioxide into the environment. The carbon footprint of healthcare is bigger than other industries like aviation and shipping. With its annual greenhouse gas (GHG) emissions equivalent to 514 coal fired power plants. Reports also say that if healthcare were a country it would be the fifth largest emitter on earth.

The HCWH report reveals that the top ten emitters make up 75 per cent of the global healthcare carbon footprint with the US, China and EU contributing 56 per cent of these emissions. The healthcare sector of India on the other hand is the seventh biggest emitter contributing 2 per cent of the global healthcare emissions.

Experts believe with access to healthcare rising post pandemic in India, this number is also slated to rise simultaneously. The report by HCWH also affirms this by showing a strong correlation between a nation's health spending and its carbon footprint. India at present is witnessing a huge capacity build in the healthcare sector with the healthcare providers expanding their bed capacities on account of increasing bed occupancies in the hospitals.

"In the developed countries, due to the insurance coverage, healthcare has been accessible to a major chunk of the population, hence the emissions have been higher. Efforts are now ongoing to increase efficiencies and reduce the carbon footprint. However in India, as the access to healthcare rises on the back of universal health insurance schemes sponsored by the governments at the Centre and state-level, the carbon footprint is also likely to grow," said Antony Prashant, Partner, Deloitte India.

Sources of Healthcare's Carbon Footprint

Reports suggest that while the emissions vastly differ in scale, each country's healthcare sector releases greenhouse gases (GHGs) when delivering care or procuring products and services and technologies from a carbon intensive supply chain.

Scope 1 emissions in India that are released directly from healthcare organisations and their owned vehicles account for 8 per cent of the sector's carbon footprint. Whereas indirect emissions termed as Scope 2 in India are largely sourced from energy consumption such as use of purchased electricity, cooling, steam and heating contributing 11 per cent.

The majority of the emissions are sourced to Scope 3 emissions that account for almost 81 per cent of Indian healthcare's emissions, according to the HCWH report. The report also reveals that 80 per cent of the Scope 3 footprint is emitted domestically in India.

"Major contributors to healthcare emissions include hospitals which have the highest energy intensity of all publicly funded buildings and emit 2.5 times more greenhouse gases than commercial buildings. Medical devices also have a high energy consumption. There have been global initiatives such as Eco-designing imaging equipment to improve efficiency of such instruments," stated Prashant.

An interesting trend to notice is the fossil fuel combustion in the healthcare industry globally which is at the heart of its carbon footprint. Energy needs sourced from electricity and thermal power supply contribute 53 per cent of all the emissions and overlap between Scope 2 (13 per cent) and Scope 3 emissions (40 per cent). This subsumes energy required by healthcare facilities and its supply chain such as the pharmaceuticals and medical devices industry.

"The scale of healthcare infrastructure and operations contributes to substantial energy consumption, water usage, waste generation, and greenhouse gas emissions. Moreover, in India, the reliance on fossil fuels for energy generation exacerbates the carbon footprint associated with healthcare. It is crucial for industry stakeholders to take proactive measures in incorporating energy efficiency, renewable energy sources, and sustainable practices into the current healthcare infrastructure," said Geena Malhotra, Global Chief Technology Officer, Cipla.

Reducing Scope 3 emissions - The Lion's Share

The Scope 3 emissions representing the lion's share of healthcare's carbon footprint fall outside the ambit of an organisation's direct control and is hence controlled either by suppliers or the consumers. In healthcare these emissions are primarily driven through the production, transport and disposal of goods and services like agriculture, pharmaceuticals, medical devices, equipment and instruments.

Industry experts believe non-availability of clean and standardised GHG data, and awareness on how best to collect the GHG emissions are few of the major hurdles that they face in curbing Scope 3 emissions and maintaining a green supply chain.

Speaking at BW Businessworld's 3rd edition of India's Most Sustainable Companies (IMSC) 2023, Aditya Gurudanti, Head - Sustainability Operations, Dr. Reddy's Laboratories stated that Scope 3 emissions are about the overall value chain of the industry and a lot of stakeholders are involved which means the expectations are also large in number and many of them are unaware about what Scope 3 emissions are or how to calculate them.

Further explaining the lack of awareness among the suppliers, Gurudanti said, "The biggest challenge I face is making stakeholders understand that reducing emissions is possible and something which can be done as Scope 3 of my organisation is Scope 1 and 2 of other organisations. And as they realise that and as the value chain realises that then Scope 3 can be tackled."

Sivala Ravi Kiran, Head EHSS, Biocon pointed out at the IMSC 2023 event that the main challenge is indeed awareness, adding that many companies do not know which tool to use to calculate their GHG data. Kiran also said that commitment from the respective management of suppliers itself is not present. "When we conducted capacity building assessments, we found that the nominated departments to calculate GHG data did not have enough knowledge to understand GHG emissions," Kiran said.

Kiran said that suppliers need a little hand holding by the big players. This will enable them avail solutions, best practices, proper tools and materials which they can use to reduce emissions.

Speaking on building sustainable supply chains Malhotra argued that organisations should not limit sustainability to compliance to industry standards alone. It is important to elevate the quality of the organisation's practices and processes as well. "Additionally, organisations must develop a sustainability code of conduct that would need to be adhered to by vendors that they are partnering with. This code of conduct can include aspects like reducing environmental impact of their operations, waste management, collective bargaining, safety practices, working conditions, etc. to ensure that Scope 3 emissions are kept to a minimum," she added.

A Carrot and Stick Approach - The Way Forward

Industry experts believe that the road to sustainability in healthcare and reducing the carbon emissions should entail incentives, infrastructure empowerment as well as regulations, which would serve as a carrot and stick strategy to create adoption of sustainable operations.

"In order to build a responsible supply chain in the healthcare industry, there is an urgent need to have an enabling infrastructure which helps in management of biomedical and other kinds of wastes which the healthcare industry cannot treat by itself. There are already reports of heavy contamination of water bodies due to absence of proper mechanisms of waste treatment in certain regions of India," Prashant said.

Legal experts say that the Bio-Medical Waste Management Rules (2016) mandate every healthcare facility to take necessary steps to ensure that healthcare waste is handled sustainably and safely. The rules also provide operating and emissions standards for healthcare units for optimal processing of healthcare waste.

Malhotra further explained that improper disposal of pharmaceutical waste and chemicals presents environmental risks. "Additionally, adherence to stringent environmental regulations, adopting cleaner technologies, and promoting sustainable practices across the supply chain are often expensive and as a result slow down the rate of adoption. Addressing these challenges is crucial for the industry to reduce its greenhouse gas emissions," Malhotra enumerated.

Suhana Islam Murshedd, Partner, Khaitan & Co said that the existing legal landscape needs to be made more robust, especially in view of the recent orders passed by the National Green Tribunal highlighting the gaps between the generation and treatment of wastes in several states as well as the lack of a mechanism for traceability of bio-medical waste.

Murshedd further stated that focussing on policies that prioritise and incentivise energy efficiency, waste management and sustainable procurement are key for the healthcare sector. "While several healthcare entities are committed to reducing their carbon footprint; these are mostly voluntary initiatives, and the absence of dedicated SOPs lead to implementation failures," Murshedd added.

The original article was published in BW Businessworld on 23^rd December 2023.