Drivers of Health Sector Scope 3 Emissions Accounting

The drive to accounting for Scope 3 GHG emissions in the health sector is multifaceted. With increased regulatory pressure for climate-related reporting, climate-related value chain risks, and the widespread adoption of GHG reduction goals, health sector organizations are seeking to better understand and manage their Scope 3 emissions. As health sector organizations navigate these external pressures and transition to more sustainable operations and supply chains, ensuring that their GHG data is high quality and continually improving in accuracy or completeness will help them to better understand the impact of sustainability initiatives. Credible GHG data enable informed decision-making, strong sustainability storytelling, and expanded opportunities for recognition or funding.

Health sector organizations recognize the value of environmental leadership as a competitive advantage. Actively engaging in Scope 3 emissions reporting and management demonstrates commitment to public health and positions these organizations as leaders in a transitioning global economy, attracting environmentally conscious talent, students, investors, or partners.

Scope 3 emissions management is also a strategic response to climate change as a material risk to health sector operations and supply chains. Managing climate-related risks, from extreme weather events that disrupt supply chains to regulatory changes that affect operational costs, requires a thorough understanding of the value chain. By identifying and mitigating emissions throughout their value chains, health sector organizations enhance their resilience against climate risks, ensuring the continuity of care and services.

New regulatory measures, like the U.S. Securities and Exchange Commission’s recent climate-related disclosure rule3, funding mechanisms like the Inflation Reduction Act and the Infrastructure Investment and Jobs Act, are also increasing scrutiny around organizational GHG emissions, often requiring public disclosures, third-party attestations, or demonstrated carbon management programs. At the state level, two recent climate disclosure bills out of California have mandated climate-related reporting requirements for large public and private companies doing business in California4. Outside the U.S., the U.K. and the European Union have mandated carbon reporting and reduction targets for Scopes 1, 2, and 3. Many health sector partners and investors will be subject to these international rules and will need to request emissions data from U.S.-based health sector organizations to support their own compliance reporting.

On the voluntary front, reporting and target-setting frameworks like the Task Force on Climate-related Financial Disclosures, the Carbon Disclosure Project, and the Science-based Targets Initiative (SBTi) offer structured expectations for emissions reporting and reductions, and have gained considerable momentum over the last several years. More recently, the White House and the U.S. Department of Health and Human Services announced the voluntary Health Sector Climate Pledge to encourage health sector organizations to decarbonize their operations and develop resiliency plans for coping with the physical impacts of climate change. The pledge calls for committed health sector organizations to develop a Scope 3 emissions inventory by the end of 2024, reduce operational emissions 50% by 2030, and to achieve net-zero emissions by 2050.5

Figure 2: Overall Scope 3 Management Journey

Many local, state, and national governments have also established economy-wide GHG reduction targets and are pursuing net-zero emissions across all sectors. As health sector organizations move to support these efforts and/or achieve their own GHG management goals, addressing Scope 3 emissions, which make up most of their overall carbon footprint, is critical to their success.