Trucost Blog / 06 Jan 2014

Understanding the True Cost of Sustainability in Healthcare

A blog by Brian Boyd, Vice President of Environment, Health, Safety & Sustainability at Johnson & Johnson in prelude to our forthcoming co-hosted webinar.

The healthcare sector’s environmental footprint is a large one – generating more than 5.9 million tons of waste each year, contributing to eight percent of the United States’ total greenhouse gas emissions and spending almost eight billion dollars annually on energy alone. As a healthcare supplier, Johnson & Johnson realizes we can help hospitals save money and reduce their impacts by providing more sustainable products, and that we need to collaborate to reach this shared goal.

While many healthcare facilities are beginning to invest more heavily in sustainability – more than 87 percent have incorporated sustainability into their decision-making process and operations, there are some that have yet to consider the benefits of sustainability and even more that struggle to make the case internally. To help address this knowledge gap and advance the issue, Johnson & Johnson recently partnered with The Wharton School of the University of Pennsylvania, through its Initiative for Global Environmental Leadership (IGEL), to host a one-day conference designed to equip healthcare professionals with insights on how to advance their organization’s commitment to and investment in sustainability and provide best practices for engaging stakeholders.

The Wharton IGEL conference was a great opportunity to get everyone talking – both about the tangible impacts of everyday operations and about new topics, such as the entire lifecycle of the products hospitals use. A key takeaway that seemed to surprise the audience was that the majority of impacts of healthcare products may actually be upstream – in the sourcing of raw materials or manufacturing – and that better mechanisms are needed to quantify these impacts, including those on ecosystem services. As someone who thinks about these upstream impacts and the associated costs of Johnson & Johnson’s products – and ultimately our customers – I wanted to use this blog to share some examples and expand on this important discussion.

Measuring the Cost of Upstream Impacts

Healthy Future 2015 Johnson and Johnson

A simple example of upstream impacts can be seen through products made from wood fiber and the ripple effect tree loss has on society. Just think back to elementary school when you learned about the importance of trees. Trees turn carbon dioxide into oxygen and serve as natural barriers for pollutants that would otherwise flow into waterways and potentially impact water quality. They also provide habitat to a plethora of species, all of which are critical to our ecosystem. Today, a value isn’t placed on the natural services trees provide, but from a healthcare perspective it should be. Tree loss contributes to air pollution, and air pollution has an obvious impact on people’s health. A decline in people’s health increases the need for medical services and raises costs for care. By undervaluing these impacts at their source, there is the potential to suffer even greater impacts long-term.

At Johnson & Johnson, we’ve brought the product lifecycle to the forefront of our product development process through EARTHWARDS®, our companywide initiative that utilizes data to identify the most significant environmental and social impacts of a product, and establishes opportunities to improve these areas. Solving the end-of-life dilemma of our products is another way we reduce impacts, and we are joined by other healthcare suppliers, such as BD and Kimberly-Clark, in this endeavor. BD’s ecoFinity® Life Cycle Solution enables hospitals to safely and economically recycle medical sharps and turns the recovered plastics into new collector products. Kimberly-Clark’s Blue ReNew program helps hospitals formalize the process for recycling sterilization wrap and then customizes for each facility’s unique needs.

Hospitals, too, are working to ensure the products they purchase are more sustainable, and I’ve been pleased to see that more than one-third of hospitals have switched suppliers to gain access to sustainable product offerings. But I believe more can be done.

After 20 years working for Johnson & Johnson and addressing environmental impacts throughout the supply chain, I’ve learned an important step to embedding sustainability is monetizing its value – including the costs and benefits of upstream and downstream investments. Healthcare often struggles to make this case with their CFOs, and attendees at the Wharton IGEL conference are eager to establish a standard methodology for determining the true value of sustainability in their investment decisions.

Communicating the Value of Sustainability

I’ve also learned that every organization has an audience who cares about what they are doing to reduce their impacts and operate more sustainably. While some healthcare players have been better at communicating their sustainability initiatives and related performance than others, there is a definite need for more communication – both to internal stakeholders as well as external audiences. Collaborating with hospitals and communicating the true value of sustainability is key to advancing this important issue and will build urgency within the industry to do so.

I can speak for Johnson & Johnson when I say that we look forward to continuing our partnership with Wharton IGEL to bring healthcare professionals together for more dialogue about how to build the case for sustainability so it can be embedded in the way every hospital operates, and in every purchase decision they make.

As a next step, we are partnering with Trucost on January 22 at noon to have a more focused discussion on how to evaluate the upstream impacts of medical products, and help quantify the costs these impacts have on ecosystem services. The webinar is open to anyone who is interested in advancing sustainability in healthcare – I hope you’ll be there: Metrics that Matter: Healthcare’s Material Impact.

We are pleased to republish this blog by Brian Boyd Vice President of Environment, Health, Safety & Sustainability at Johnson & Johnson in prelude to our forthcoming co-hosted webinar.

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