The CFO’s Guide to Environmental Stewardship

Sustainability Roadmap for Health Care
Sustainability for Health Care Facilities Glossary HealQuestTM

Finance teams led by the chief financial officer support sustainability and environmental stewardship initiatives through bolstering the value proposition, defining outcomes, and tracking and measuring progress toward sustainability goals. Whether through analyzing carbon pricing or assessing risk, CFO’s play an integral role in in environmental stewardship.

 
Cover image of the AHA's guide: The Health Care Leader's Guide to Sustainability and Environmental Stewardship

The Health Care Leader’s Guide

Sections:

Sustainability Team | CEO | COO | CFO | Board | Business Case

Sustainability initiatives in health care organizations should include operational practices and focused projects — both of which require funding. As a key voice in the financial analysis for these projects and initiatives, the chief financial officer and finance team can support the value proposition by helping to define expected outcomes. Finance teams also have the skills to support internal measurement and tracking to monitor progress towards sustainability goals.

KPIs for sustainability and decarbonization may include:

  • Energy consumption and associated emissions.
  • Fuel consumption in owned and leased vehicles and calculated emissions.
  • Emissions from business travel.
  • Emissions from anesthetics.

Because 80% of health care emissions are from purchased goods and services:

  • Track spending to analyze scope 3 emissions within the organization.
  • Work with operations and procurement to identify suppliers that can reduce scope 3 emissions.
Hospital GHG Emissions Impact by Category, a visual graph of items shown between Ease of Data Collection and Mitigation Opportunity
Jamie Dimon, CEO of JPMorgan Chase, 'We have a goal to reduce the carbon intensity of our financing portfolio… and we are minimizing the environmental impact of our physical operations.'

Sections

 

Benchmarking Outside of Health Care

 

Some chief financial officers (CFOs) are treating non-financial KPIs and targets with the same prudence as traditional financial targets and linking sustainability to value drivers.

68% of CFOs globally take responsibility for their organization’s environmental stewardship performance.

73% of investors surveyed say they will devote considerable time and attention to evaluating the physical risk implications from the environment when they make asset allocation and selection decisions (see figure).

Percentage of respondents who say they usually conduct a structured, methodical evaluation of nonfinancial disclosures. 27%, 32%, 72%
Framework for environmental stewardship reporting (TCFD); Governance, Strategy, Risk Management, Metrics, and Targets are each displayed in smaller concentric circles.
 

Recommendations for the Health Care CFO

 
  1. Review financial analysis practices to recognize environmental impacts. For example:
    • Assess risk to disruption in operations.
  2. Inquire with financing, banking and insurance providers about environmental stewardship practices:
    • Competition in the marketplace creates incentives for providers to innovate in environmental stewardship, if they understand the organization values it.
    • How do partners incorporate sustainability in the services they offer?
  3. Recognize sustainability in non-financial reporting for your organization:
    • Annual environmental stewardship report