Can environmental sustainability unlock savings for the healthcare sector?

Veolia Australia and New Zealand

Wednesday, 22 January, 2020

Can environmental sustainability unlock savings for the healthcare sector?

With the healthcare sector being responsible for 7% of all carbon emissions in Australia, the case for change is clear. In fact, if the healthcare sector were a country, it would be the fifth-largest emitter of CO2 emissions on the planet.1 But what if being more environmentally sustainable could also generate much-needed savings that could be directed back to patient care?

When a high proportion of operational spend is dedicated to the acute-care setting, it’s easy to dismiss looking into more sustainable practices. But it’s possible to look at things differently. Healthcare organisations futureproofing their operations through more sustainable practices are likely to be ahead of the game in years to come, as cost and environmental pressures continue to mount.

There are increasing calls for healthcare facilities to build resilience when faced with challenges such as water management, energy security and affordability — all of which affect operational performance and the bottom line — and fundamentally impact the levels of care delivered to patients.

“We’ve talked to a lot of leaders in the healthcare setting that struggle to get traction when it comes to reviewing their approach to sustainability,” said Tim Lee, National Sales and Business Development Manager, Health, for Veolia Australia and New Zealand. “But once the connection between operational costs, patient care and reduced carbon emissions is made, all of a sudden it becomes a much more compelling conversation.”

Healthcare spend in Australia rose above 10% of GDP for the first time in 2015–16 and continues to grow above inflation. Estimates say this will rise above $200 billion for the first time in 2020. In the face of this, the industry faces shrinking budgets, an ageing population and increased technology costs driving a higher cost of care, reduced tax benefits and downward pricing pressure from the private health insurance sector.

These challenges increase scrutiny on operational costs. Meanwhile, the costs associated with energy, water use and greenhouse gas emissions continue to rise. The biggest challenge becomes how to pursue a sustainable healthcare system in an era of accelerated change.

The call for a more sustainable healthcare sector

Key industry bodies including the Institute of Healthcare Engineering, Australia (IHEA) and the International Federation of Hospital Engineering (IFHE) are calling for better environmental outcomes within the healthcare sector. The Climate and Health Alliance also published a Framework for a National Strategy on Climate, Health and Well-being for Australians, which mentions a more sustainable, low/zero carbon and climate-resilient healthcare sector.

Pressure is also mounting on the public health sector to reduce carbon emissions, especially as state governments adopt critical emissions reductions targets: 7% of Australia’s total carbon footprint (public hospitals 2.4%, private hospitals 0.7%)2 is generated by the sector.

“This is gaining more attention from government and environmental organisations over time, as we work to lower Australia’s overall carbon emissions and become more energy and water resilient as a nation,” Lee said.

Given the pressure faced by healthcare administrators, it’s imperative they receive support to achieve a greener healthcare operation.

The best approach to sustainability in healthcare

Being sustainable is more than just new ways to recycle waste, recover energy or re-use water. It’s about a range of initiatives working in concert to create a true circular economy. It’s also about cost neutrality where possible, or even better, a path to savings.

As the partner selected by Mid North Coast Local Health District, Veolia Energy Solutions Australia and New Zealand have delivered an Energy Performance Contract, guaranteed to achieve energy savings of 4,070,106 kWh-e. One year into implementation, these targets have been exceeded by more than 20%, and the overall savings are estimated to be over $1.3m annually. This reduction in electricity consumption is equivalent to the savings of over 4548 tonnes of carbon dioxide and 1240 tonnes of carbon — which is equivalent to the planting of around 68,225 trees. 

A partnership with the right provider means organisations like Mid North Coast LHD have been able to achieve their sustainability targets and operational savings.

“Ultimately, these savings can be redirected to a higher level of patient care,” Lee said.

“More reliable facilities leave healthcare professionals to do what they do best — look after their patients and stay focused on delivering even better health care into the future.”


1. Health Cares Climate Footprint: How the Health Sector Contributes to the Global Climate Crisis and Opportunities for Action, published by Health Care Without Harm; ARUP, 2019.

2. The carbon footprint of Australian health care - Malik, Lenzen, McAlister, Forbes McGain, 2018.

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