The private sector should be a natural partner in tackling the growing problem of climate change. After all, the business community has the ability to respond to the rapid innovation, scalability, and systemic change needed to successfully curb emissions and meet climate goals.
I have seen first-hand this unique opportunity for private sector leadership. Most of my waking hours are focused on her two important areas: conservation and business. And because we have a foot in each of these worlds, I strongly believe that the business community can and should lead the way towards a more sustainable future.
In the private sector, I have focused specifically on building purposeful and impactful healthcare companies through venture capital (Frist Cressey Ventures) and private equity (Cressey and Company). Both companies aim to transform healthcare and improve the lives and well-being of all people, with a particular focus on health equity. But like all successful companies, sourcing innovation and responsibly funding business operations to achieve these goals requires each company in the portfolio to You need to track your profits carefully.
And this is a real challenge for the private sector as a whole, and for individual companies seeking to directly combat climate change. It's about striking the right balance between what helps the bottom line and what helps the ultimate health of the planet (and employees, consumers, and society). community). Finding this balance often requires additional resources outside of business practices and day-to-day operations, which can be cumbersome and costly for companies.
The good news is that the cost of clean energy technologies is falling rapidly and the business case for greener initiatives is improving. And smart, common-sense federal and state policies can help close the remaining gaps and enable the conditions for a faster transition to a cleaner economy.
Smart policies can redefine environmental behavior
The Suppression of Inflation Act of 2022 shows how public policy can leverage business investment in environmental action. This creates certainty and prioritizes investments in clean energy, accelerating the transition to electric vehicles and significantly reducing the risks many companies take in decarbonizing and reducing emissions. Ta. Already, the Inflation Control Act has pushed domestic clean energy projects to about $110 billion, with a recent Bloomberg article saying, “$86 billion in private investment, 51 new or expanded factories to produce solar panels, 10 new factories for battery manufacturing, [and] Over 100,000 clean energy jobs. ”
Another recent example is the Bipartisan Infrastructure and Jobs Act of 2021, which makes transformative investments in modernizing our nation's crumbling infrastructure. These funds allocated to each state are used to update transportation networks in ways that reduce greenhouse gas emissions and increase resilience to extreme weather events, which have particularly increased in recent decades. And in the process, we are creating thousands of good-paying jobs with a focus on partnerships with small and medium-sized businesses.
There are many more policy opportunities that remain untapped at the federal and local levels. However, the key to smart policy is to align outcomes. To be more proactive, companies need to continually come up with creative ideas that drive business opportunities and outcomes, while helping to achieve agreed decarbonization targets.
To date, companies have entered a period of heightened societal expectations for social responsibility, with more than 90% of companies now having a formal strategy to manage their environmental, social, and governance (ESG) objectives. formulating or developing. Unfortunately, the ESG movement has been influenced by politicization, but moving in the direction of environmental health and human health is something that employees and consumers broadly want and are beginning to demand. More and more companies are starting to realize that. It is well documented that workers increasingly want to work for companies that are responsible to their communities.
But it is not enough to rely on good intentions, good intentions, and purely voluntary actions. We need to wisely develop policies and market mechanisms that give companies the right incentives and directions to increase the level of embedding social and environmental values across their businesses.
Private Sector Initiatives: Healthcare and Beyond
We are now beginning to realize that environmental focus and successful business decisions are not necessarily mutually exclusive. In addition to advocating for smart policies, organizations in all sectors can start working towards sustainability goals that lead to long-term change. Kaiser Permanente commits to net-zero carbon emissions by 2050, Patagonia transforms business model to respond to climate crisis, aims to be carbon neutral by 2030 and power all products with clean energy Some companies, such as AppleAAPL, have committed to manufacturing in , and many others have already blazed this trail.
As a clinician for 20 years, then as a policy maker in the health field, and now as an innovator in business-based health services, I personally have closely observed the health sector and its role in contributing to population decline. We seek to understand more fully the role they play. I encourage others in the business world to view their field the same way.
In the world of health care, the obvious irony can be surprising. The healthcare sector is responsible for keeping our bodies and minds healthy, but this “healing” industry accounts for a very high proportion of our country's total carbon emissions and is wreaking havoc on human health and well-being. It is known to be true. In fact, the medical industry accounts for more than 8.5% of our country's carbon emissions (this value increased by 6% from 2010 to 2018) and more than 4% of global greenhouse gas emissions.
Healthcare is beginning to address this sustainability paradox. One example of this is dealing with waste. The National Academy of Medicine has launched the Action Collaborative on Decarbonizing the U.S. Healthcare Sector. The aim is to leverage public-private partnerships to accelerate environmental impact across the health sector. Here are some of the actions they are calling for to increase accountability and sustainability.
- Establish an executive-level sustainability team and specific decarbonization goals (including an implementation plan).
- Reducing unnecessary emissions, physical waste and single-use plastics from buildings.
- Implement systems and processes to reduce food waste and food packaging.
- Optimize product delivery and reduce travel and vehicle emissions. and,
- Provide community incentives for electric vehicle charging infrastructure and public transportation.
But healthcare is just one area of the business world that is stepping up when it comes to sustainability. We would like to see more involvement from other sectors as well. There are a few things we all need to consider, regardless of our specific business or industry, to efficiently achieve our goals at an industry level.
- Improve your organization's energy efficiency by reevaluating your supply chain, increasing your use of clean energy sources, and setting clear, science-based decarbonization goals.
- Establish a team of board members, local operators, community leaders and staff to track progress towards achieving sustainability goals.
- Consider how we can raise our voices as community advocates and lobby for better policies, mandatory and voluntary programs and incentives for decarbonization.
- Innovate and scale sustainable strategies that work for your business.
- Encourage participation in climate-related discussions and share the importance of resilience strategies, lessons learned, and best practices. and,
- By investing in nature, we not only reduce emissions, we actually remove carbon from the atmosphere.
Together, these actions can rewrite the narrative when it comes to engaging the business community to advance sustainability and climate action. Building a more climate-resilient future is undoubtedly in our best interest. But following the same path requires thinking long-term and more broadly.
And while persuading companies to take action now may be one of the most difficult aspects, the reality is that sooner or later large investments will be made in the face of varying degrees of uncertainty. would need to be done. This is not easy. Already we are challenging ourselves to rethink solutions more imaginatively and to stop thinking of “good for nature” as opposed to “good for people” or “good for business.” .
lead the way
Successful companies are inherently already good at innovating quickly and efficiently, moving quickly, and scaling rapidly. Great companies know how to communicate internally and externally to achieve goals, expand reach, and share best practices. And companies know how to align public policy with top priorities. These are the very same tools and strategies needed to effectively combat intensifying climate change and its impacts.
And it's more than just policy. We need more innovation. And we need more capital and investment towards existing solutions. The business community has great potential to invest in highly effective and scalable climate solutions and transform markets in response to demand. The private sector can pilot new technologies and accelerate our ability to more effectively find and implement solutions to the climate crisis.
The for-profit and nonprofit sectors have much to learn from each other as they work together around agreed goals. Adjustment requires active and focused attention. By working together, we can create thoughtful and ambitious programs that are better for people, businesses and the planet. When businesses are at their best, they do exactly what the climate crisis demands: they adapt, solve problems, and act quickly. Addressing the challenge of climate change doesn't have to be another issue that divides communities. We can make climate resilience our common best interest.
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