Health Care Sustainability

Source: U.S. National Library of Medicine

Source: U.S. National Library of Medicine

On July 31 the Sustainability Accounting Standards Board (SASB) released sustainability accounting standards for the health care industry; their first in a set of ten planned industry-specific standards.  SASB is a non-profit founded in 2011 to develop standards for publicly-listed companies to disclose material sustainability issues in Securities and Exchange Commission (SEC) filings.  The health care industry standards are broken down into specific guidance for six sectors: biotechnology, pharmaceuticals, medical supplies and equipment, health care delivery, health care distributors and managed care.  For the third installment in the series on industry-specific sustainability standards we’ll review the standards for health care delivery.

The sustainability accounting standard for the Health Care Delivery sector is comprised of two parts: 1) disclosure guidance and 2) accounting standards on sustainability topics.  The disclosure guidance is the result of a multi-stakeholder process to identify material sustainability topics specific to the health care delivery sector.  The stakeholder group identified eight specific sustainability topics for the health care delivery sector:

  • Quality of Care and Patient Satisfaction
  • Access for Low Income Patients
  • Employee Recruitment, Development, and Retention
  • Pricing and Billing Transparency
  • Energy and Waste Efficiency
  • Climate Change Impacts on Human Health and Infrastructure
  • Fraud and Unnecessary Procedures
  • Patient Privacy and Electronic Health Records

Accounting standards define proposed metrics for companies to use when disclosing sustainability issues.  The goal is to increase the comparability of disclosures across the industry by encouraging the use of standard metrics.  The accounting metrics for the Energy and Waste Efficiency topic include:


Total annual energy consumed (gigajoules) and percentage renewable


Total weight of Regulated Medical Waste Generation and total weight by disposition


Total weight of pharmaceutical waste generation and total weight by disposition. Break down by: (1) hazardous waste and (2) non-hazardous (solid) waste

The description of the Energy and Waste Efficiency topic points out that the Environmental Protection Agency estimates that U.S. hospitals spend $8.8 billion annually on energy; and that improved energy management could lower operating costs and enhance shareholder value.

The SASB standards are different than other reporting standards covered previously, such as the Dairy Industry Stewardship and Sustainability Guide, in that they are inherently integrated reporting standards.  Integrated reporting means that sustainability information is disclosed in the periodic financial disclosures required of public companies by the Securities and Exchange Commission (SEC); not in a separate document such as an annual sustainability report.  The contention here is that sustainability information is material, not just nice to know, and investors should consider it as part of the total mix of information when making investment decisions.

The next sector specific standards planned for release by SASB are for the financial sector.  The full list of the ten sectors that SASB is actively developing standards for are shown below.  Timelines and the status for standard development can be found on the SASB website here.

  • Health Care
  • Financials
  • Technology & Communications
  • Non Renewable Resources
  • Transportation
  • Services
  • Resource Transformation
  • Consumption
  • Renewable Resources & Alternative Energy
  • Infrastructure

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