The healthcare sector is a major contributor to carbon emissions globally, and it’s comparatively higher than the shipping and aviation industry. Healthcare facilities (hospitals in particular) require significant amounts of energy to provide emergency treatment and healthcare services 24/7 * 365 days a year. It’s not surprising then that the sector emits approximately 748 million metric tons of greenhouse gases each year (in United States, Australia, Canada and England)¹ which is equivalent to more than 162 million cars driven for one year.
In Australia, the healthcare sector represents approximately 7% of total emissions².
Although Healthcare organisations are focused on saving lives and patient care, they have a golden opportunity to generate a sizable return on investment with sustainability measures and support the transition towards a Net Zero economy by 2050.
Healthcare organisations see sustainability as a costly distraction from their core operations and strategic priorities, perhaps due to the lack of performance from past sustainability initiatives, even though with today’s modern technology and innovations, we can see sustainability providing as much as a 12% to 50% Return on Investment (ROI).
Adopting sustainable measures such as renewable energy and optimising central plant and building management systems for energy efficiency, will help healthcare organisations
- reduce their operating costs
- reduce overall environmental impact of their operations
- Financial savings from such measures can be reallocated to improving patient care and procuring life-saving medical equipment and additional staff.
- Improvements to facilities leads to better working conditions and wellbeing of staff and patients
While the ROI on sustainability initiatives are attractive, finding the funds to invest in such projects can be a barrier for most healthcare organisations (in both public and private sectors) – especially given the impact of COVID on capital and operating expense budgets. There are however service delivery models that can help facilitate access to funding.
In the Public Sector, Local Health Districts have been leveraging Energy Performance Contracts to both secure funding (via Treasury Loans) as well as implement a range of energy efficiency and net zero solutions. As an example, the Nepean Blue Mountains Local Health District (NBMLHD) was able to secure a Treasury Loan from NSW Government for a $7.9 million Energy Performance Contract. This was possible due to the Guaranteed Savings provided by 3E Group Australia & NZ, which greatly reduces the financial risks of the project and enables NBMLHD to achieve 14.8% ROI – read the NBMLHD EPC case study to learn more.
In the Private Sector, healthcare organisations are utilising performance-based services agreement (an off-balance sheet funding solution) to procure energy savings, with no upfront capital required. As an example, Constitution Health Plaza were able to upgrade their facilities through $1.87 million paid for by 3E Group . (case study).
Moreover, an innovative partnership through an Energy as a Service (EaaS) model can also help to preserve CAPEX and allows for even greater scope and flexibility to achieve Net Zero through a combination of energy/water/waste infrastructure services and digital solutions that support Net Zero ambitions.
The healthcare sector plays a huge role in promoting sustainability in their respective communities. Their role goes beyond becoming energy efficient, but they can also promote the connection between good health and sustainability. Partnering with 3E Group will help this sector and their communities reach their Net Zero goals.
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¹ https://medicine.yale.edu/news-article/20960/ ² https://www.thelancet.com/journals/lanplh/article/PIIS2542-5196(17)30180-8/fulltext