It’s time for healthcare to accelerate its climate journey – The European Sting – Critical News & Insights on European Politics, Economy, Foreign Affairs, Business & Technology

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This article is brought to you through The European Sting’s collaboration with the World Economic Forum.

Author: Kavitha Hariharan, Director, Healthy Societies, Marsh McLennan Advantage, Adrienne Cernigoi.Research Manager, Marsh McLennan Advantage, Claudio Saffioti, Research Manager, Marsh McLennan Advantage, Cheryl Cosslett, Research Analyst, Marsh McLennan Advantage


  • The impacts of climate change on health care have created a crisis by damaging the supply of health care, including facilities and supply chains.
  • Due to differing climatic contexts, a systematic approach is needed for healthcare providers in different communities to understand and prioritize the varied impacts of climate change on healthcare operations, finances and reputation.
  • Proactively measuring and reporting on climate performance can result in better access to capital and contracts, better terms and greater confidence from lenders, financial institutions and governments.

The impacts of climate change on health care are global and greater than widely acknowledged. Consider the UK issuing a Level 4 health alert after record high temperatures in July, the 50% spike in heat sickness this summer in India or the $3.1 billion in recovery costs for New York hospitals after Superstorm Sandy.

Climate impacts are intensifying to become one of the most significant health crises of this century. Regardless of increasing and changing health care needs, such as increased injuries and the spread of infectious diseases, climate change is placing undue pressure on the operations of health care providers through damaged facilities and disrupted supply chains. In addition, climate change, directly and indirectly, exacerbates pressing environmental, social and governance (ESG) issues in health, including burnout, health disparities, and the availability of key resources like the water.

A changing climatic context

Because healthcare providers have different exposures based on location, time horizon, types of assets, and underlying vulnerabilities in their communities, they need a systematic approach to understand and prioritize climate impacts on their operations, finances and reputation. A first step is to understand which particular threats are facing where, as explored in a recent report by Marsh McLennan, Feeling the heat: how healthcare providers can meet the climate challenge. They may also uncover unrealized opportunities such as green capital pools, energy efficiencies, and improving a sense of pride and determination to retain talent.

Standardized climate reporting frameworks can help drive a structured analysis of risks and opportunities, given that tools for quantifying climate risks to healthcare beyond property damage are in their infancy. For example, the Task Force for Climate-related Financial Disclosures (TCFD) is a relatively simple and adaptable framework increasingly used by companies and regulators. Using the TCFD, healthcare providers can assess both the physical impacts induced by climate and weather changes as well as the risks associated with the transition to a low-carbon economy (see risk factors below). below). Other tools such as scenario analysis can facilitate stress testing and help identify the most significant risks to an organization.

Physical and transition risks

For healthcare providers, the most significant hazard is physical damage to infrastructure and operations. Hospital buildings and infrastructure are often not designed or adapted to deal with heat waves, storms, floods and wildfires. In addition, extreme weather events can strain even those who have been adapted. Technology and equipment breakdowns, drug and supply shortages, or flooded floors limit functionality when hospitals need it most. And recovery and repair can take months or even years.

Although less sudden than the surges seen during climate shocks, care needs and costs also increase due to the delayed effects of extreme weather and the cumulative effects of climate-related stresses such as rising temperatures and levels of pollution. the sea. As the demand for health care increases, pressures on staff and other resources can lead to errors, delays or loss of care. Inflated costs and lost revenue, such as elective care delayed or abandoned during or after crises, can force health care providers to run at a loss or even put them out of business.

Tightening regulations on greenhouse gas emissions – such as carbon pricing requirements, energy standards and climate risk disclosure – are likely to target the health sector in the short to medium term, creating transition risks. In addition, loan costs, insurance premiums and penalties increase for “dirty” transactions. In the United States, the Office of Climate Change and Health Equity plans to apply financial penalties to hospitals that do not meet new sustainability standards.

Seizing climate opportunities

The same risk factors, if taken into account, can create significant opportunities. For example, changing regulations and stakeholder expectations can create transition risks for unprepared healthcare providers, but the same trend presents huge opportunities for those who take effective action. Proactively measuring and reporting on climate performance can result in better access to capital and contracts, better terms and greater confidence from lenders, financial institutions and governments.

  • Investments in decarbonization and adaptation make infrastructure resilient to climate change and reduce operating costs. Reducing energy consumption and climate-proofing infrastructure can save millions, while reducing a healthcare provider’s carbon footprint.
  • Technology can build resilience and efficiency. For example, telemedicine and remote monitoring can both reduce emissions and continue to provide care during a climate shock and drones can transport emergency supplies.
  • Green incentives and capital provide greater access to financing opportunities. Some healthcare providers are beginning to take advantage of loans, grants and tax incentives tied to environmental, social and corporate governance (ESG) or sustainability.
  • ESG-related activities reduce insurance costs. Perceived to have a lower risk profile, healthcare providers who act on climate risks negotiate more affordable insurance premiums.
  • Sustainability initiatives help attract talent and boost workforce morale. ESG performance is already a source of competitive advantage for employees.
  • Improving community resilience makes climate care needs more manageable. Climate change exacerbates disparities in health, access and social determinants. Projects that meet the needs of communities can also improve their resilience to climate impacts.

Mitigating the impacts of climate change on healthcare

Healthcare providers urgently need to understand the risks of a changing climate context and seize its opportunities, so that they can build resilience to climate impacts and reduce their contribution to climate change. Some interventions will allow adaptation and mitigation objectives to be pursued simultaneously, while others may present trade-offs that providers need to articulate and negotiate.

Three strategies can help: aligning business strategy with the climate agenda, shaping corporate governance to incorporate climate risks and opportunities, and improving communication and collaboration with the broader health ecosystem and surrounding communities. to have more impact.

Unprepared health care providers will teeter from one emergency to the next. To ensure the sustainability of assets and operations, healthcare must act now, before this once secondary issue becomes the next hot platform.

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