What if some of the most promising opportunities to improve healthcare business performance are being overlooked because they are labelled as sustainability initiatives?
Environmental sustainability is often managed as a distinct organizational priority, with its own targets, commitments, and reporting requirements. While these serve important purposes, separating sustainability from core business planning can obscure its financial and strategic relevance.
For healthcare organizations navigating rising costs, resource constraints, climate risks, and changing market expectations, this distinction matters. Environmental considerations influence many of the same factors that determine business success: operating costs, customer relationships, access to capital, and long-term resilience.
Yet recognizing sustainability's importance and understanding its contribution to business performance are not the same thing.
A 2024 assessment of 13 academic hospitals in the Toronto Academic Health Science Network found that nearly all had established cross-functional teams to advance sustainability, while only slightly more than half prioritized sustainability through organizational strategy and leadership.¹ The findings illustrate an important distinction: environmental initiatives can gain traction without necessarily becoming an established part of strategic decision-making.
The opportunity is not necessarily to do more on sustainability, but to better understand where it can help achieve existing business objectives.
Start With the Business, Not the Sustainability Plan
A credible sustainability strategy begins with understanding how an organization creates value, what drives performance, and where environmental risks and opportunities intersect with those drivers.
For healthcare operators, this might mean improving procurement efficiency, reducing resource costs, or strengthening facility resilience. For medical manufacturers, it could mean meeting customer requirements, protecting supply chain relationships, or maintaining market access.
Through Delphi's work in the healthcare sector, we are seeing environmental performance become more consequential to commercial relationships. Customers are requesting more detailed sustainability information from suppliers, while investors increasingly expect credible climate transition and resilience plans.
These pressures are changing the economics of sustainability. What was previously considered a voluntary environmental commitment may now influence contract eligibility, revenue retention, risk exposure, or access to capital.
NHS England provides a clear example. Beginning in April 2027, expanded carbon reduction plan requirements will apply to relevant procurement activities, with more comprehensive Scope 3 emissions reporting required for higher-value procurements and applicable frameworks.² For affected suppliers, credible environmental information is becoming a condition of commercial participation, not simply a reporting exercise.
The business case for sustainability is not static. Organizations that evaluate environmental priorities only against historical obligations or conventional cost savings may overlook opportunities emerging from changing commercial expectations.
Make the Business Case Explicit
Recognizing where sustainability intersects with business performance is the first step. The next is assessing the financial and strategic implications.
When environmental initiatives are evaluated primarily against sustainability targets or implementation costs, their broader contribution to business performance can be missed.
Consider healthcare waste management. Reducing waste can lower disposal expenses, but the opportunity may extend to procurement, material efficiency, and inventory management. Evaluating the full cost of materials, from purchasing through disposal, can reveal value that is less apparent when environmental and financial considerations are assessed separately.
The Hospital for Sick Children (SickKids) in Toronto provides a practical example. Through staff education and improved biomedical waste segregation in operating rooms, the hospital reduced incorrectly sorted material in biomedical waste bins from 75% to 26%. The initiative diverted approximately 30 tonnes of waste from unnecessary treatment, saved 128,700 litres of water annually, and reduced disposal costs by $29,000 per year.³
Other business cases are less straightforward. Some initiatives generate direct savings; others protect revenue, strengthen resilience, or reduce exposure to climate-related risks. These benefits require different forms of evaluation. Direct savings can be assessed through conventional financial analysis, while revenue protection and risk mitigation may require scenario analysis and an understanding of potential consequences.
A sound business case distinguishes between value that can be measured, value that can reasonably be estimated, and benefits that remain uncertain. Without that discipline, organizations risk undervaluing opportunities or overstating their returns.
The business case is not simply what it costs to act, but what an organization stands to gain, protect, or potentially miss.
Integrate Sustainability Into Business Decisions
Identifying value is not the same as capturing it. Even a compelling business case can fail to deliver if it remains separate from the decisions and responsibilities that drive business performance.
At Delphi, a recurring challenge we see in healthcare is connecting environmental priorities to the business decisions that determine whether they move forward. Our work helps organizations assess sustainability-related impacts, risks, and opportunities, identify those most relevant to their business objectives, and develop practical plans for implementation. The value lies not simply in identifying what an organization could do, but in establishing why it matters to the business and how to act on it.
Rather than creating additional sustainability processes, organizations can incorporate environmental considerations into existing decision-making. Procurement can assess lifecycle costs and resource efficiency alongside clinical requirements. Finance can incorporate environmental opportunities into investment planning. Risk management can evaluate climate exposures alongside other threats to business continuity.
Crucially, ownership must follow the expected business outcome. Sustainability teams can identify opportunities and build the case for action, but procurement, operations, finance, and commercial leadership are often responsible for delivering the anticipated benefits.
When an environmental opportunity is tied to an operational objective or financial target, it can compete for resources on its business merits rather than relying solely on sustainability commitments.
Not every initiative will justify investment, nor can every benefit be expressed as a direct financial return. Organizations must weigh expected value, feasibility, environmental impact, and available resources while safeguarding patient safety, infection prevention, and quality of care.
Measure What Matters
The final test is whether the anticipated value materializes.
Establishing a reliable baseline for environmental and operational performance provides a starting point for evaluating progress and demonstrating results.
Environmental indicators such as waste diversion, energy consumption, and emissions remain essential. But initiatives justified through business benefits should also be assessed against those expectations. Did the investment reduce costs, improve efficiency, protect a commercial relationship, or mitigate a material risk?
For healthcare leaders, the opportunity is not to revisit every sustainability decision already made. It is to recognize that changing commercial expectations and operating conditions may be creating value that existing approaches have yet to capture.
The organizations that stand to benefit most will not necessarily be those pursuing the most sustainability initiatives, but those best able to recognize where environmental action serves their business—and turn those opportunities into results.
Written by:
Adam Schwarz, MBA, FSA
Director, Corporate Sustainability and Reporting, Delphi
aschwarz@delphi.ca | 587-436-5368
References
1. Toronto Academic Health Science Network. (2025). 2024 Climate & Sustainability Report. Supporting summary: University of Toronto, Dalla Lana School of Public Health, New report highlights wins—and opportunities—for climate action and sustainability in healthcare (March 13, 2025). https://www.dlsph.utoronto.ca/2025/03/13/sustainability-in-healthcare-tahsn-scorecard/
2. NHS England. (2026). 2027 NHS carbon reduction plan requirements for the procurement of NHS goods, services and works. https://www.england.nhs.uk/long-read/2027-nhs-carbon-reduction-plan-requirements-for-the-procurement-of-nhs-goods-services-and-works/
3. The Hospital for Sick Children (SickKids). (2025). Measuring progress, driving impact: Highlights from the 2022–2025 environmental sustainability strategy (2025 Sustainability Report, pp. 16–17). https://www.sickkids.ca/siteassets/about/strategy--performance/environmental-sustainability/environmental-sustainability-report-2022-2025.pdf