The changing landscape of environmental regulation in the US has drawn renewed attention to mechanisms for sustainability disclosure. The recent push by President Joe Biden for the mandatory disclosure of climate risk at an organization level has shown that it is only a matter of time before these measures become legally enforceable. Healthcare and pharma organizations have been responding to these future shifts with a sense of urgency. Kaiser Permanente‘s Chief Health Officer, Bechara Choucair, recently reiterated the significance of an “audacious” approach to ESG by stating, “We must commit to doing the difficult work of decarbonizing our supply chain to greatly broaden our contribution to a carbon-free economy.”

The pathways to decarbonization are numerous, but there is a common thread that unites these —the willingness to look at your organization’s numbers in order to identify the best possible means to a climate-smart future. Accounting, reporting and disclosure are just a few of the technical terms that simplify the navigation of this process. It is useful to note that organizations like the Cleveland Clinic have made use of this process, specifically the Global Reporting Initiative’s (GRI) mechanism to understand their climate impacts. The GRI is one prominent example among a host of frameworks that include the CDP, SASB, TCFD, PRI and others. However, there continue to be additional areas of ambivalence and opacity that complicate the adoption of reporting mechanisms by interested organizations. In order to address this, we have identified three key areas that are integral to an understanding of sustainability reporting — What does a report include? What are the frameworks that are relevant to an organization? What are the benefits to be gained?

A sustainability disclosure report has so far been a voluntary action assumed by proactive organizations interested in addressing evolving environmental considerations. These follow formats that are customized to reflect the abilities and constraints of specific industries. The process typically consists of a first-stage questionnaire detailing organizational efforts toward climate change adaptation and mitigation. The questions each house metrics that ultimately contribute to information on waste management, energy utilization, materials and resource composition, and environmental quality, with additional sections on social engagement, industrial innovations and governance. The majority of frameworks simultaneously address ESG and investment drivers (such as the examples below), and thus pre-emptively address future legislation that would mandate reporting. The 2021 consultations of the Securities and Exchange Commissions (SEC) offer an important indication of federal engagement on climate risk disclosure.

While there are numerous frameworks that are currently available, there are two examples that offer a useful glimpse into what makes a framework relevant. First, the CDP (previously known as the Carbon Disclosure Project) offers a reporting instrument that assembles information through four distinct questionnaires on climate change, water security, forests and supply chain. While all four areas may not be relevant to every healthcare organization, the underlying aim is to arrive at a workable set of questions that best analyze a specific case. For healthcare, climate change and supply chains are of immediate significance and can be addressed through the establishment of an emissions inventory consisting of Scope 1, 2 & 3 sources that apply to a healthcare facility and its suppliers. The CDP platforms organizations with positive actions by employing a scoring protocol that drives investor decisions with the option of making this information publicly accessible. A key benefit of the CDP is its international visibility as a frontrunner and reliable standard for disclosure.

The SASB (Sustainability Accounting Standards Board), which constitutes the second framework, differs from the CDP in its core approach. It has created standards for 77 industries that offer investor-facing information on environmental performance. For healthcare, the SASB has identified six relevant industries that include health care delivery, medical equipment and supplies, and biotech and pharmaceuticals. In addition to providing conventional scope-wise emissions data, the metrics used also allow organizations to highlight their progress in areas of leadership and innovation, and explore impacts on social capital. Any SASB protocol consists of information on sustainability themes and metrics, technical details about the operationalization of metrics, and the opportunity to conduct comparative analyses of target organizations and their peers. A major advantage of the SASB is its explicit focus on financially relevant sustainability criteria.

The CDP and SASB are only two among a host of other sustainability reporting frameworks that can be employed to improve the environmental performance of organizations and drive investor interest. These offer legible and impactful information, and demonstrate the importance of committing to sustainable pathways at the earliest available opportunity. The most notable benefits of these frameworks are their clear reporting protocols and comprehensive national and international reach.

Frameworks often have different drivers. Unlike the examples discussed above which focus on a combination of ESG and investment criteria, there are other frameworks such as the SDGs which focus solely on ESG, and the LEED which focuses on infrastructure.